Judge Lisa K. Sepe-Wiesenfeld, Case Number: 23SMCV01522, Date: 2024-04-04 Tentative Ruling

Judge: Lisa K. Sepe-Wiesenfeld, Case: 23SMCV01522, Date: 2024-04-04 Tentative Ruling

Defendant Larry Moore (“Moore”) moves the Court for an order striking Plaintiffs Susan Jeffers and 2444 Fourth Street, LLC (“Plaintiffs”)’s claims against him pursuant to Code of Civil Procedure section 425.16 on the grounds that the allegations arise from Moore’s exercise of a protected activity within the meaning of Code of Civil Procedure section 425.16, any basis of the claims is barred because Moore was following the advice of counsel, and the claims are barred by the litigation privilege. Defendants Geronimo Perez (“Perez”) and Daniels, Fine, Israel, Schonbuch & Lebovits, LLP also move the Court for an order striking Plaintiffs’ claims against them pursuant to Code of Civil Procedure section 425.16 on the grounds that the claims arise from protected activity, and Plaintiffs cannot demonstrate a probability of prevailing on any of their claims against Perez and Daniels, Fine, Israel, Schonbuch & Lebovits, LLP. Plaintiffs oppose both motions.

Plaintiff Susan Jeffers is the manager and only member of Plaintiff 2444 Fourth Street, LLC, who owns the condominium unit at 2444 Fourth Street #5 in Santa Monica. (Compl. ¶¶ 2-4.) In April 23, 2014, Defendant Geronimo Perez and his former law firm were retained to represent Jeffers in a probate action (Los Angeles Superior Court Case No. BP120623); at the time, Jeffers was the former trustee of the 1987 Revocable Intervivos Trust of Charles M. Edwards u/t/d January 25, 1987, whose primary asset was the unit at 2444 Fourth Street #5. (Compl. ¶¶ 10-11.) Plaintiff was also a beneficiary of the trust with her three brothers. (Compl. ¶ 11.) During this representation, Perez obtained confidential information related to Jeffers’ finances, the LLC, and the unit. (Compl. ¶ 12.) Perez negotiated a settlement in the probate action, which allows Jeffers to receive sole membership interest in the LLC as her only distributive share of the trust. (Compl. ¶ 13.) On October 15, 2014, the other parties in the probate action transferred 100% of their membership interests to Jeffers, and on March 11, 2015, Perez withdrew as Jeffers’ counsel. (Compl. ¶¶ 14-15.) In 2013, Defendant Larry Moore filed a lawsuit (Moore v. 2444 Fourth Street LLC, Los Angeles Superior Court Case No. SC121224), wherein Moore claimed he had the legal right to purchase the unit (Compl. ¶¶ 16-17), and in January 2018, Moore filed a second lawsuit (Moore v. 2444 Fourth Street LLC, Los Angeles Superior Court Case No. SC128726), again claiming that he had the legal right to purchase the unit (Compl. ¶ 18). In 2020, both actions were tried together with an ultimate judgment against Moore. (Compl. ¶ 19.) On April 11, 2022, Moore filed a third lawsuit, where was he was represented by Perez and Defendant Daniels, Fine, Israel, Schonbuch & Lebovits, LLP. (Compl. ¶¶ 21-22.) Plaintiffs alleges malicious prosecution on the ground that no reasonable attorney would have thought a third lawsuit was tenable (Compl. ¶ 24); breach of fiduciary duty based on the prior attorney-client relationship between Jeffers and Perez (Compl. ¶ 74); financial elder abuse by Moore for impairing Jeffers’ real property rights (Compl. ¶¶ 102-104); attempted extortion by the firm and Perez based on allegations that Jeffers had committed tax fraud so they would not file this action (Compl. ¶¶ 112-115); and negligence by all Defendants (Compl. ¶ 128).

Accordingly, section 425.16 posits a two-step process for determining whether an action is a strategic lawsuit against public participation (SLAPP). First, the Court decides whether the defendant has made a threshold showing that the challenged cause of action is one arising from protected activity. (See Code Civ. Proc., § 425.16, subd. (b)(1).) “A defendant meets this burden by demonstrating that the act underlying the plaintiff’s cause fits one of the categories spelled out in [section 425.16,] subdivision (e).” (Braun v. Chronicle Publishing Co. (1997) 52 Cal.App.4th 1036, 1043.) Those categories include “(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).) If defendant makes a threshold showing that the challenged cause of action is one arising from protected activity, the burden shifts to the plaintiff to establish a likelihood of prevailing on the complaint. (See Code Civ. Proc., § 425.16, subd. (b)(1).)

To invoke Code of Civil Procedure section 425.16, a defendant need only demonstrate that a suit arises from the defendant’s exercise of free speech or petition rights. (See Code Civ. Proc., § 425.16, subd. (b); City of Cotati v. Cashman (2002) 29 Cal.4th 69, 78.) This is determined by “the gravamen or principal thrust of the action.” (See In re Episcopal Church Cases (2009) 45 Cal.4th 467, 477.) “In the anti-SLAPP context, the critical point is whether the plaintiff’s cause of action itself was based on an act in furtherance of the defendant’s right of petition or free speech.” (City of Cotati v. Cashman, supra, 29 Cal.4th at p. 78.) “In making its determination, the court shall consider 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).)

“A special motion to strike is particularly appropriate when the action sought to be stricken is one for malicious prosecution.” (Barak v. The Quisenberry Law Firm (2006) 135 Cal.App.4th 654, 659.) “By definition, a malicious prosecution suit alleges that the defendant committed a tort by filing a lawsuit.” (Jarrow Formulas, Inc. v. LaMarche (2003) 31 Cal.4th 728, 735.) Plaintiffs’ other claims for breach of fiduciary duty, financial elder abuse, and attempted extortion are also based on the same purported tortious conduct. Here, each of these claims is based on Moore’s conduct in filing three actions against them and litigating the same and Perez and Daniels, Fine, Israel, Schonbuch & Lebovits, LLP’s filing of the third action against them and litigating the same. This conduct falls within the purview of Code of Civil Procedure section 425.16, subdivision (e). Therefore, the Court finds Defendants have satisfied the first prong of the anti-SLAPP statute as to Plaintiffs’ claims for malicious prosecution, breach of fiduciary duty, financial elder abuse, and attempted extortion, as Plaintiffs’ claims arise from protected activity.

In her negligence claim, Plaintiffs allege only that “Defendants owed a duty to Plaintiffs,” and they “are all liable for negligence for any damages suffered as a result of their failure to exercise reasonable care.” (Compl. ¶ 127.) Plaintiffs’ claim is vague, leaving the Court to speculate as to the basis for liability against any of the defendants. However, Plaintiffs have taken care to incorporate the allegations of paragraph 1 to 95 into this claim, thereby compelling a conclusion that Plaintiffs’ negligence claim arises out of the same activity alleged in the malicious prosecution and breach of fiduciary duty claims, that is, Moore’s conduct in filing three actions against Plaintiffs and litigating the same and Perez and Daniels, Fine, Israel, Schonbuch & Lebovits, LLP’s filing of the third action against them and litigating the same. Again, this conduct falls within the purview of Code of Civil Procedure section 425.16, subdivision (e), such that Defendants have satisfied the first prong of the anti-SLAPP statute as to Plaintiffs’ claim for negligence, as it also arises from protected activity.

If the defendant makes a threshold showing that the challenged cause of action is one arising from protected activity, the burden shifts to the plaintiff to establish a likelihood of prevailing on the complaint. (See Code Civ. Proc., § 425.16, subd. (b)(1).) “In order to establish a probability of prevailing on the claim, a plaintiff responding to an anti-SLAPP motion must state and substantiate a legally sufficient claim.” (Wilson v. Parker, Covert & Chidester (2002) 28 Cal.4th 811, 821, superseded by statute on other grounds as noted in Hutton v. Hafif (2007) 150 Cal.App.4th 527, 547, citation, quotation marks, and brackets omitted.) To do so, “the plaintiff must demonstrate 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.” (Ibid., quotation marks omitted.) In considering whether a plaintiff’s claim has merit, “the trial court considers the pleadings and evidentiary submissions of both the plaintiff and the defendant,” and while “the court does not weigh the credibility or comparative probative strength of competing evidence, it should grant the motion if, as a matter of law, the defendant’s evidence supporting the motion defeats the plaintiff’s attempt to establish evidentiary support for the claim.” (Ibid., emphasis in original.)

Plaintiffs provide evidence that the third lawsuit was terminated in Plaintiff 2444 Fourth Street, LLC’s favor, it was commenced at Moore’s direction, and Perez and Daniels, Fine, Israel, Schonbuch & Lebovits, LLP were responsible for bringing the underlying action and do not dispute their role in this regard. (Opp’n, Jeffers Decl. ¶¶ 63, 64, Exs. 28, 29.) (See Zamos v. Stroud (2004) 32 Cal.4th 958, 970 [“an attorney may be held liable for malicious prosecution for continuing to prosecute a lawsuit discovered to lack probable cause”]). Thus, 2444 Fourth Street, LLC has satisfied the first element of proving its malicious prosecution claim.

As for the second element, “[a] litigant will lack probable cause for his action either if he relies upon facts which he has no reasonable cause to believe to be true, or if he seeks recovery upon a legal theory which is untenable under the facts known to him.” (Soukup, supra, 39 Cal.4th at 292.) The minute order for the Court’s order sustaining 2444 Fourth Street, LLC’s demurrer without leave to amend stated that the action was based on Moore’s claim to purchase the subject unit; the demurrer was sustained based on the doctrine of issue preclusion because Moore was asserting rights that were identical to those asserted in the prior consolidated action, and those issues were directly adjudicated in 2444 Fourth Street, LLC’s favor; Moore’s contention that the prior judgment was moot was not well taken; and amendment would be futile. (Opp’n, Jeffers Decl. ¶ 64, Ex. 29.) Given that this ruling was based entirely on the judgment of the prior actions, the Court finds that 2444 Fourth Street, LLC has sufficiently shown the claims against it were “brought without probable cause,” as they were untenable under the facts known to Defendants, thereby proving the second element of a malicious prosecution claim.

Here, the Court finds 2444 Fourth Street, LLC has not demonstrated the action was brought with malice. 2444 Fourth Street, LLC asks the Court to infer malice based on a conclusory statement that Defendants could not have reasonably believed that Moore had any rights, and the third lawsuit was part of a wrongful scheme to deprive Plaintiffs of property rights in tandem with a nonjudicial foreclosure, but this requires the Court to conclude malice based solely on 2444 Fourth Street, LLC’s speculation.

Further, if the Court were to adopt 2444 Fourth Street, LLC’s argument here based on these contentions alone, every case which is terminated based on res judicata or collateral estoppel would be subject to a malicious prosecution claim, and it is axiomatic that “[t]he tort of malicious prosecution is disfavored both because of its potential to impose an undue chilling effect on the ordinary citizen’s willingness to report criminal conduct or to bring a civil dispute to court and because, as a means of deterring excessive and frivolous lawsuits, it has the disadvantage of constituting a new round of litigation itself.” (Zamos v. Stroud, supra, 32 Cal.4th at p. 966.) Thus, given that the Court finds that 2444 Fourth Street, LLC cannot demonstrate a likelihood of prevailing on its claim for malicious prosecution against Defendants. Accordingly, Defendants’ special motions to strike are GRANTED as to 2444 Fourth Street, LLC’s claim for malicious prosecution.

In her breach of fiduciary duty claim, Jeffers alleges that Perez and Daniels, Fine, Israel, Schonbuch & Lebovits, LLP owed her a fiduciary duty because Perez was her former counsel, he obtained confidential information, and he used this information when he sought to force a sale of the unit. (Compl. ¶¶ 75-81.) First, Jeffers fail to allege or establish any fiduciary relationship between her and Daniels, Fine, Israel, Schonbuch & Lebovits, LLP, and no fiduciary relationship can be inferred where Jeffers allege that Perez represented Jeffers while he was with another firm. Jeffers’ allegation that the firm can be liable under a vicarious liability theory is not well taken, as she provides no legal authority to support liability under the theory advanced here, i.e., where the firm itself had no fiduciary relationship with Jeffers.

Further, Jeffers alleges a breach of fiduciary duty because Perez sought to force a sale of the unit. Civil Code section 47, subdivision (b), makes privileged any statements made during judicial proceedings, which “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 have some connection or logical relation to the action.” (Silberg v. Anderson (1990) 50 Cal.3d 205, 212.) Such communications are protected by the litigation privilege for “all torts except malicious prosecution.” (Ibid.) It is clear that Plaintiffs’ claim for breach of fiduciary duty is based on Perez and Daniels, Fine, Israel, Schonbuch & Lebovits, LLP’s conduct in filing the third action, and the litigation privilege set forth in Civil Code section 47 precludes liability based on this conduct except as to a malicious prosecution claim. It follows that Jeffers cannot succeed on this claim based on the litigation privilege.

Further, Jeffers fails to provide evidence that Perez relied on confidential information in filing the third action. To the contrary, it appears the allegations of the third lawsuit arose out of the same facts as the first two complaints, which were publicly filed. For these reasons, the Court finds that Jeffers cannot demonstrate a likelihood of prevailing on her claim for breach of fiduciary duty. Thus, Perez and Daniels, Fine, Israel, Schonbuch & Lebovits, LLP’s special motion to strike is GRANTED as to Jeffers’ claim for breach of fiduciary duty.

In the third cause of action, Jeffers alleges financial elder abuse by Moore in his assertion of a right to purchase the unit. (Compl. ¶ 102.) Put simply, Jeffers has failed to allege financial elder abuse in this claim. The mere filing of an action to obtain a right to property cannot be determined to constitute the take, secreting, appropriation, or retention of Jeffers’ property where Jeffers alleges in her complaint that Moore did not succeed in doing so, as all three actions were terminated against Moore. Insofar as Jeffers asserts that her harm is retaining attorneys to bring the present action, she was not required to do so in any way, i.e., she is not defending against any claim here. (Compl. ¶ 108.) Further, for the same reasons stated above, Moore’s conduct, too, is protected by the litigation privilege set forth in Civil Code section 47. Accordingly, Moore’s special motion to strike is GRANTED as to Jeffers’ claim for financial elder abuse.

In the fourth cause of action, Jeffers alleges that Perez accused Jeffers of a crime by stating in the third lawsuit and a subsequent letter that Jeffers was committing tax fraud by failing to disclose the transfer of ownership. (Compl. ¶¶ 112-113.) Notably, Jeffers alleges that the letter and declaration intended to intimidate Jeffers into dropping her intent to file a lawsuit. (Compl. ¶ 120.) This does not constitute an attempted threat to extort property or other consideration from Jeffers, as the intention to file litigation is not property or consideration. Even if it were, the declaration and letter, both related to litigation and perceived litigation, are also protected by the litigation privilege set forth in Civil Code section 47 for the same reasons stated above. Thus, Perez and Daniels, Fine, Israel, Schonbuch & Lebovits, LLP’s special motion to strike is GRANTED as to Jeffers’ claim for attempted extortion.

To succeed on a claim for negligence, Plaintiffs must establish the elements of (1) “the existence of a legal duty of care,” (2) “breach of that duty,” and (3) “proximate cause resulting in an injury.” (McIntyre v. Colonies-Pacific, LLC (2014) 228 Cal.App.4th 664, 671.) In the negligence claim, Plaintiffs allege that their claim is based on the allegations of paragraphs 1 to 95, without other information as to the nature of their claim. The Court has found that Plaintiffs cannot succeed as to the claims asserted in those paragraphs, and Plaintiffs do not allege any different conduct which may form the basis of this claim. Accordingly, Defendants’ special motions to strike are GRANTED as to Plaintiffs’ claim for negligence.

Defendant Larry Moore’s Special Motion to Strike (Anti-SLAPP) Pursuant to Code of Civil Procedure section 425.16 is GRANTED, and Defendants Geronimo Perez and Daniels, Fine, Israel, Schonbuch & Lebovits, LLP’s Special Motion to Strike the Complaint Pursuant to Cal. Code Civ. Proc. Section 425.16 is GRANTED. Defendant Larry Moore’s Demurrer to Complaint, scheduled for hearing on April 9, 2024, is taken OFF CALENDAR. Defendant Larry Moore and Defendants Geronimo Perez and Daniels, Fine, Israel, Schonbuch & Lebovits, LLP shall prepare, serve, and submit proposed judgments as per statute.

Code of Civil Procedure section 425.16, subdivision (c), provides that “a prevailing defendant on a special motion to strike shall be entitled to recover his or her attorney’s fees and costs.” Under section 425.16, an award of fees and costs is mandatory. (Ketchum v. Moses (2001) 24 Cal.4th 1122, 1131.) In that Defendants are the prevailing parties, they are entitled to their reasonable attorney fees and costs, the amount of which shall be determined upon Defendants filing a noticed motion for attorneys’ fees and memorandum of costs.

Perez and Daniels, Fine, Israel, Schonbuch & Lebovits, LLP object to certain statements within the declaration of Susan Jeffers. Objection Nos. 2 to 5, 8, 11, 13 to 17, 16(b), 17(b), 18, 20, 21, 23, 25, 26, 28, 30 to 35, 37 to 39, and 42 are SUSTAINED. The Court declines to rule on Objection No. 6, as it was not material to the Court’s ruling herein. All other objections are OVERRULED. Perez and Daniels, Fine, Israel, Schonbuch & Lebovits, LLP also object to certain statements within the declaration of Dan Spitz. Objection Nos. 3 to 6 are SUSTAINED. All other objections are OVERRULED.