Judge Lee W. Tsao, Case 22NWCV01475 2023-04-06 Tentative Ruling

Judge: Lee W. Tsao, Case: 22NWCV01475, Date: 2023-04-06 Tentative Ruling

Case Number: 22NWCV01475 Hearing Date: April 6, 2023 Dept: C

COLLINS v. MIRTH

CASE NO.: 22NWCV01475

HEARING: 04/06/23

TENTATIVE ORDER

Plaintiff/Cross-Defendant GERALD JAMES COLLINS’ Special Motion to Strike the Cross-Complaint is GRANTED.

Moving Party to give notice.

Plaintiff/Cross-Defendant GERALD JAMES COLLINS’ Request for Judicial Notice is GRANTED. (Cal. Ev. Code ¶452.)

This action for partition was filed by Plaintiff/Cross-Defendant GERALD JAMES COLLINS (“Plaintiff” or “Cross-Defendant”) on December 1, 2022 regarding real property located at 4858 Firestone Blvd., South Gate, CA 90280 (“Subject Property”). Plaintiff alleges the following relevant facts: “Plaintiff and Defendants collectively own 100% of the Property after it was passed to them by two trusts related to Carolyn A. Collins. [¶] Plaintiff, Becky, and Lori are all siblings. Carolyn A. Collins was their mother and gave each of her three children a 1/3 interest in the Property. Subsequently Lori transferred her 1/3 interest into a trust she shares with her husband David. [¶] Plaintiff now desires to sell his interest in the Property, but the remaining Defendants have refused. [¶] The Property is not capable of partition in kind. Plaintiff therefore requests that the Property be portioned by way of a sale of the Property and a distribution of proceeds….” (Complaint ¶¶6-9.) The Complaint asserts one sole cause of action for Partition.

On February 2, 2023, the Subject Cross-Complaint (“XC”) was filed by Defendants/Cross-Complainants BECKY A. MIRTH, Trustee of the BECKY MIRTH 2011 Separate Property Trust; DAVID F. MONICO, Trustee of the MONICO FAMILY TRUST dated November 19, 2020; and LORI C. MONICO, Trustee of the MONICO FAMILY TRUST dated November 19, 2020 (collectively “Cross-Complainants”).

The XC asserts one sole cause of action for Breach of Fiduciary Duty against Cross-Defendant.

Cross-Defendant now moves to strike the XC. Cross-Defendant argues that Cross-Complainants’ allegations used to support the Breach of Fiduciary Duty claim are subject to the litigation privilege.

Cross-Complainants allege the following relevant facts:

· “Collins has filed a complaint in this action for a court ordered partition by sale of the Leased Property. If such a sale occurs, C&J will lose its facility presently located on the Leased Property. It will either have to go out of business by liquidation or relocate at great expense. Money recovered from liquidation would be de minimis compared to the present estimated fair market value. The cost of relocation could be $500,000 or more.” (XC ¶7.)

· “As a director and officer of C&J, Collins has a fiduciary duty of loyalty and good faith to act in the best interests of all the shareholders, and maximize C&J’s profits. He must not compete against the interests of C&J for his own personal gain.” (XC ¶10.)

· “As of the date of this Cross-Complaint, Collins has not resigned as an officer and director of C&J. Thus, by petitioning this Court to sell the Leased Property so that he can recover his one-third value, he has breached his fiduciary duty to the Mirth Trust and to the Monico Trust, since he is competing against the interests of C&J and its shareholders for his own personal gain. Further, this act is not in the best interests of any of the shareholders and will not maximize C&J’s profits. His actions could drive the company out of business with a loss to all shareholders of its faire market value of $2,400,000 or force C&J to relocate at a cost of $500,000 or more.” (XC ¶11.)

In ruling on a special motion to strike, the Court engages in a two-step process. First, the Court decides whether the moving defendant has made a threshold showing that the challenged claims arise from protected activity. The moving cross-defendant’s burden is to demonstrate that the act or acts of which a cross-complainant complains were taken “in furtherance of the [cross-defendant’s] right of petition or free speech under the United States or California Constitution in connection with a public issue” as defined by statute. If the court finds such a showing has been made, the burden then shifts to the cross-complainant, who must demonstrate a probability of prevailing on the merits claim. (Equillion Enterprises v. Consumer Cause, Inc. (2002) 29 Cal.4th 53, 67.)

A moving party can satisfy its burden by showing: (1) statements were made before legislative, executive, or judicial proceedings, or made in connection with matters being considered in such proceedings; or (2) statements were made in a public forum, or other conduct in furtherance of the exercise of the constitutional rights of petition or free speech, in connection with issues of public interest. (CCP §425.16(e); Equillon Enterprises v. Consumer Cause, Inc. (2002) 29 Cal.4th 53, 66.) A plaintiff opposing a special motion to strike meets his or her burden by making a prima facie showing of facts which would support a judgment in plaintiff’s favor. (Kyle v. Carmon (1999) 71 Cal.App.4th 901, 907.)

In order to invoke the protection of CCP §425.16, a cross-defendant need only demonstrate that a suit “arises from” defendant’s exercise of free speech or petition rights. (See CCP §425.16(b).) In opposing an anti-SLAPP, cross-complainant must present admissible evidence and cannot rely on the allegations of the complaint. (Roberts v. Los Angeles County Bar Association (2003) 105 Cal.App.4th 604, 613-614.)

As to the first prong, it is clear that filing a Complaint for partition constitutes protected activity. (See CCP § 425.16(e)(1), (2); Rusheen v. Cohen (2006) 37 Cal.4^th 1048.) Cross-Complainants do not argue otherwise and they appear to concede the issue. (Opp. p. 2:12.) Therefore, Cross-Defendant has met the burden of demonstrating that the XC arises from protected activity.

It is then Cross-Complainants’ burden of establishing a probability of prevailing on the merits of the Breach of Fiduciary Duty claim. (CCP §425.16(b).) Cross-complainants argue that Cross-Defendant, as CEO and director of C&J Lift Truck, Inc., has breached his fiduciary duty to act in the best interest of the corporation by seeking a partition which will result in significant damages to C&J.

Cross-Complainants do not address, and cannot overcome, the absolute nature of the litigation privilege. As indicated, the allegations contained within the XC arise out of Cross-Defendant’s filing of this action. The absolute litigation privilege bars a civil action for damages for communications made in any judicial proceeding. (Cal. Civ. Code § 47.) Statements made during or in connection with a judicial or official proceeding are privileged, whether or not the statements were made with malice, or other bad motive. (Silberg v. Anderson (1990) 50 Cal.3d 205.) “The litigation privilege is also 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.) As relevant here, the litigation privilege is a defense to a cause of action involving breach of fiduciary duty. (Mireskandari v. Gallagher (2020) 59 Cal.App.5^th 346.)

The Special Motion to Strike is GRANTED.

As the prevailing party, Cross-Defendant is entitled to reasonable attorney’s fees, which may be requested in a separately noticed motion. (CCP §425.16(c)(1). “[A] prevailing defendant on a special motion to strike shall be entitled to recover his or her attorney’s fees and costs. (Id.) “Any SLAPP defendant who brings a successful motion to strike is entitled to mandatory attorney fees. (Ketchum v. Moses (2001) 24 Cal.4th 1122, 1131.) However, the award of attorney fees must be reasonable. (See Robertson v. Rodriguez (1995) 36 Cal.App.4th 347, 362.) [“We readily conclude section 425.16 similarly authorizes an award of reasonable attorney fees to the prevailing party…The right of prevailing defendants to recover their reasonable attorney fees under section 425.16 adequately compensates them for the expense of responding to a baseless lawsuit.”

Cross-Defendant seeks to recover $12,092.50 for almost 12 hours of work based on Attorney Brethen’s hourly rate of $550.00/hr.; plus $402.50 for paralegal fees; plus $61.50 for filing and service fees. The Court has reviewed the Declarations of Attorney Geoffrey C. Brethen, which provides a summary of the time spent litigating the instant anti-SLAPP motion. The Court finds that Cross-Defendant has established an entitlement to $3,361.50 ($550/hr. x 6 hrs.) + ($61.50).