Judge Helen Zukin, Case 22SMCV00500 2022-08-18 Tentative Ruling

Judge: Helen Zukin, Case: 22SMCV00500, Date: 2022-08-18 Tentative Ruling

Case Number: 22SMCV00500 Hearing Date: August 18, 2022 Dept: 207

Background

Plaintiff ProHealth Advanced Imaging Medical Group., Inc. (“Plaintiff”) brings this action against Defendants Hess D. Panah, Esq., Hesam Dean Yazdanpanah AKA D. Hess Panah, and the Law Offices of Hess D. Panah (collectively “Defendants”) for unsatisfied medical liens. Plaintiff alleges Defendants represent litigants in personal injury lawsuits and would recommend clients to Plaintiff for medical services and treatment to be done pursuant to liens to be satisfied from settlement funds obtained in the patients’ personal injury actions. Plaintiff alleges Defendants have settled several of the underlying personal injury actions but have failed to satisfy Plaintiff’s liens from those settlement funds as required.

On May 27, 2022, Defendants filed a Cross-Complaint against Plaintiff alleging causes of action for (1) unfair debt collection under Civil Code § 1788.17, and (2) unfair business practices under Business and Professions Code § 17200. Plaintiff now brings a special motion to strike Defendants’ first cause of action pursuant to Code Civ. Proc. § 425.16. Plaintiff’s motion is unopposed.

Legal Standard

In 1992, the Legislature enacted Code Civ. Proc. § 425.16 as a remedy for the “disturbing increase in lawsuits brought primarily to chill the valid exercise of the constitutional rights of freedom of speech and petition for the redress of grievances.” (C.C.P. §425.16(a); Wilcox v. Sup. Ct. (1994) 27 Cal.App.4th 809, 817.) The lawsuits are commonly referred to as “SLAPP” lawsuits, an acronym for “strategic lawsuit against public participation.” (Equilon Enterprises, LLC v. Consumer Cause, Inc. (2002) 29 Cal.4th 53, 57, fn. 1.) A defendant opposing a SLAPP claim may bring an “anti-SLAPP” special motion to strike any cause of action “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….” (C.C.P. § 425.16(b)(1).)

In ruling on an anti-SLAPP motion, a trial court uses a “summary-judgment-like procedure” at an early stage of the litigation. (Varian Medical Systems, Inc. v. Delfino (2005) 35 Cal.4th 180, 192.) The procedure is a two-step process. First, the moving defendant must show that the acts of which the plaintiff complains were protected activity, namely, that they were taken “in furtherance of the [defendant]’s right of petition or free speech under the United States or California Constitution in connection with a public issue.” (C.C.P. §425.16(b)(1).) If the defendant carries that burden, the burden shifts to the plaintiff to demonstrate a probability of prevailing on the claim. (C.C.P. § 425.16(b)(3).)

In making both determinations, the trial court considers “the pleadings, and supporting and opposing affidavits stating the facts upon which the liability or defense is based.” (C.C.P. § 425.16(b)(2); Equilon, supra, 29 Cal.4th at 67.)

Pursuant to section 425.16(f) “[t]he special motion may be filed within 60 days of the service of the complaint or, in the court’s discretion, at any later time upon terms it deems proper.”

Analysis

The Court begins by determining whether the first cause of action asserted in Defendants’ Cross-Complaint arises from protected activity within the meaning of Code Civ. Proc. § 425.16. “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.) “‘[T] 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.’” (Id. at 1063 [quoting City of Cotati v. Cashman (2002) 29 Cal.4th 69, 78].) “‘[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.’” (Id. [quoting Navellier v. Sletten (2002) 29 Cal.4th 82, 89] [alteration in original].) “Instead, the 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.’” (Id. [quoting Navellier, supra, 29 Cal.4th at 92) [alteration in original].) “‘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) . . . .’” (Id. [quoting Equilon Enterprises v. Consumer Cause, Inc. (2002) 29 Cal.4th 53, 66.) “In short, in ruling on an anti-SLAPP motion, courts should consider the elements of the challenged claim and what actions by defendant supply those elements and consequently form the basis for liability.” (Id.)

Plaintiff argues the first cause of action arises from protected activity because it concerns medical services provided by Plaintiff on a lien basis to be paid from settlement funds of personal injury litigants to whom those services were provided. Plaintiff claims because the liens arose in the context of litigation, “the existence of the lien (‘contract”) [sic] falls squarely within the protection of the Anti Slapp [sic] statutes.” (Motion at 7.)

California Back Specialists Medical Group v. Rand (2008) 160 Cal.App.4th 1032 (“Rand”) is directly on point. Defendant in Rand was an attorney who contracted with plaintiff to provide medical services to defendant’s clients pursuant to liens on their personal injury actions. Plaintiff filed an action against defendant to collect on those unpaid liens. Defendant brought an anti-SLAPP motion to strike, arguing “his conduct with respect to the liens was protected activity because he disbursed the funds as an attorney and was representing his clients in the underlying actions.” (Id. at 1037.) The trial court denied defendant’s motion and further deemed it frivolous, awarding plaintiff its’ attorneys’ fees and costs. Defendant appealed and the Court of Appeal affirmed the trial court’s ruling.

In determining the first prong of the anti-SLAPP analysis, the Court of Appeal noted the “anti-SLAPP statute does not apply where protected activity is only collateral or incidental to the purpose of the transaction or occurrence underlying the complaint.” (Id. at 1037.) The Court went on to find plaintiff’s claims did not concern protected activity: “CBSMG's complaint is based on the underlying controversy between private parties about the validity and satisfaction of the liens. These issues were never under consideration in any court or official proceedings until CBSMG filed the current action.” (Id.) The Court also noted “Not all attorney conduct in connection with litigation, or in the course of representing clients, is protected by section 425.16.” (Id., citing Freeman v. Schack (2007) 154 Cal.App.4th 719 [contract and tort action against attorney for representing adverse interests in litigation not subject to the anti-SLAPP statute]; Benasra v. Mitchell Silberberg & Knupp, LLP (2004) 123 Cal.App.4th 1179 [action against attorney for breach of duty of loyalty arising from representation of clients with conflicting interest not subject to the anti-SLAPP statute]; Moore v. Shaw (2004) 116 Cal.App.4th 182 [action against estate planning attorney for participation in breach of trust not subject to anti-SLAPP motion].) Accordingly, the Court of Appeal affirmed the trial court’s denial of defendant’s anti-SLAPP motion and attorney fee award in plaintiff’s favor. (Id. at 1038.)

The facts of Rand are squarely on point and concern an identical dispute over unsatisfied liens for medical services provided to litigants. That these liens originated in the context of litigation does not mean all actions or disputes concerning the liens are protected activity covered by Code Civ. Proc. § 425.16. Plaintiff here challenges only the first cause of action in Defendants’ Cross-Complaint. The first cause of action is for unfair debt collection in violation of Civil Code § 1788.17. Defendants allege Plaintiff failed to give the notice required by statute and has “wrongfully and falsely claimed to be owed the full face value of the medical liens.” (Cross-Complaint at ¶¶20-21.) Defendants also claim Plaintiff wrongfully sent open accounts to collections and threatened Defendants’ clients. (Id. at ¶24.) Defendants also dispute Plaintiff’s assertion that the litigation underlying the liens asserted in Plaintiff’s Complaint have been settled and become owing. (Id. at ¶26.) Defendant’s first cause of action is based on actions taken by Plaintiff to collect on the liens which form the basis of Plaintiff’s claims against Defendants, and not on any actions taken with respect to the underlying litigation itself.

This is one step further removed than the alleged protected activity the Rand Court found to be so clearly unprotected as to be frivolously asserted. Rand made it clear actions taken concerning medical service liens are not entitled to protection under Code Civ. Proc. § 425.16 simply because the liens arose in the context of litigation. As in Rand, the subject cause of action here is simply a dispute “between private parties about the validity and satisfaction of the liens” as well as Plaintiff’s subsequent efforts to collect on those liens. The issues raised by Defendants’ first cause of action were similarly “never under consideration in any court or official proceedings” prior to Defendants’ filing of the Cross-Complaint.

Plaintiff’s reliance on Navellier v. Sletten (2002) 29 Cal.4th 82 is misplaced. In Navellier, plaintiffs had elected defendant to serve as an independent trustee of a fund created by plaintiffs. The fund had contracted with one of plaintiffs to provide investment advice. After his election, defendant and the other trustees terminated this contract with plaintiff. Plaintiffs then sued defendant in federal court. While the federal action was pending, plaintiffs and defendants entered into negotiations, during which defendant signed a release of claims. Defendant subsequently filed counterclaims in the federal action. Plaintiffs moved for summary judgment on those counterclaims, alleging they were released by defendant in connection with the release of claims he had executed. The federal court granted the motion for summary judgment and the case proceeded to trial on plaintiffs’ claims, on which defendant prevailed.

The plaintiffs then filed an action against defendant in California state court. Plaintiffs asserted causes of action for fraud and breach of contract against defendant Sletten, arguing he had breached his agreement with plaintiffs by filing the counterclaims in the federal action. Defendant brought an anti-SLAPP motion to strike. The trial court denied the motion under the first prong in the anti-SLAPP analysis and the California Supreme Court reversed, finding plaintiff’s claims against defendant stemmed from protected activity taken by defendant, namely his filing of counterclaims in the federal litigation: “In alleging breach of contract, plaintiffs complain about Sletten’s having filed counterclaims in the federal action. Sletten, plaintiffs argue, ‘counterclaimed for damages to recover money for the very claim he had agreed to release a year earlier’ and ‘was sued for that act.’ A claim for relief filed in federal district court indisputably is a ‘statement or writing made before a … judicial proceeding’ (§ 425.16, subd. (e)(1)).” (Id. at 90.)

The same facts are not present here. Unlike the plaintiffs’ claims in Navellier, Defendants’ first cause of action here is not based on any writings, statements, or other actions made or taken by Plaintiff in the underlying litigations. Rather, as set forth above, Defendants’ first cause of action is based on actions taken by Plaintiff completely unrelated to the underlying litigation. Rand, not Navellier, is directly on point. Under Rand, Plaintiff cannot satisfy its burden in showing the acts forming the basis of Defendants’ first cause of action for unfair debt collection were protected activity, and accordingly Plaintiff’s special motion to strike pursuant to Code Civ. Proc. § 425.16 is DENIED. As the Court has found Plaintiff cannot establish the first prong of the anti-SLAPP analysis, it need not consider the second prong and declines to do so.

Conclusion

Plaintiff and Cross-Defendant ProHealth Advanced Imaging Medical Group, Inc.’s Special Motion to Strike Pursuant to Code Civ. Proc. § 425.16 is DENIED.