Judge Mark A. Young, Case 19SMCV99329 2023-04-19 Tentative Ruling

Code of Civil Procedure section 425.16 permits the Court to strike causes of action arising from an act in furtherance of the defendant's right of free speech or petition, unless the plaintiff establishes that there is a probability that the plaintiff will prevail on the claim. “The anti-SLAPP procedures are designed to shield a defendant’s constitutionally protected conduct from the undue burden of frivolous litigation.” (Baral v. Schnitt (2016) 1 Cal.5th 376, 393.) “The anti-SLAPP statute does not insulate defendants from any liability for claims arising from the protected rights of petition or speech. It only provides a procedure for weeding out, at an early stage, meritless claims arising from protected activity.” (Id. at 384.)

“Resolution of an anti-SLAPP motion involves two steps. First, the defendant must establish that the challenged claim arises from activity protected by section 425.16. If the defendant makes the required showing, the burden shifts to the plaintiff to demonstrate the merit of the claim by establishing a probability of success.” (Baral, supra, 1 Cal.5th at 384, citation omitted.) The California Supreme Court has “described this second step as a ‘summary-judgment-like procedure.’ The 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. ‘[C]laims with the requisite minimal merit may proceed.’” (Id. at 384-385 [citations omitted].)

Code of Civil Procedure section 425.16(f) requires that a special motion to strike be filed within 60 days of service of complaint, or later with court permission. The second amended complaint (SAC) was served via substitute service on September 18, 2022. Service was perfected on September 20, 2022. Thus, service was complete on September 30, 2022. 60 days from September 30 was November 29, 2022. Defendant served and filed the instant motion on November 30, 2022, a day late. Thus, the instant motion is untimely. As set forth in the Court’s February 7, 2023, order, the Court has exercised its discretion to consider the merits of the matter.

Defendant moves to strike the specific portions of the second amended complaint (SAC) related to defendant Cohen’s alleged assistance in committing financial elder abuse by obtaining a portion of the Duttons’ $427,000.00, secreting that money, and paying Robert Ouriel from the Duttons’ money.

Code of Civil Procedure section 425.16(e) defines protected acts as the following: 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.

Cohen allegedly represented Rodica Marinescu in the related action (case no. SC127259) from on or about March or April 2017 until no later than December 22, 2017, the day the Court entered its order granting Cohen’s motion to be relieved as Marinescu’s attorney of record. Cohen notes that the SAC does not specifically allege how or in what way Cohen participated in the alleged conspiracy to defraud the Duttons. Cohen was purportedly brought into the suit because he allegedly “acted as a conduit through which Ouriel received additional funds from Marinescu.” (See Staub Decl. ISO motion for leave to amend SAC.) Cohen argues that because he obtained this sum during his representation of Marinescu, these acts are protected. Cohen reasons that the gravamen of the claim is based upon communications between Cohen and Marinescu, without which Cohen could not have “assisted” Marinescu or had the ascribed knowledge. Cohen concludes that the claims are therefore based on his exercise of his right to petition.

Upon review of the SAC, the Court concludes that the cause of action does not arise from such protected communications. To give rise to the cause of action, the communications/petitioning activity needs to be the wrong complained of itself. “At the first step, the moving defendant bears the burden of identifying all allegations of protected activity, and the claims for relief supported by them. When relief is sought based on allegations of both protected and unprotected activity, the unprotected activity is disregarded at this stage.” (Baral, supra, 1 Cal.5th at 396.) “[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.” (Park v. Board of Trustees of California State University (2017) 2 Cal.5th 1057, 1060, emphasis added; see Navellier v. Sletten (2002) 29 Cal.4th 82, 89 [“the critical consideration is whether the cause of action is¿based on¿the defendant’s protected free speech or petitioning activity”].) The analysis must focus on “the allegedly wrongful and injury-producing conduct that provides the foundation for the claims.” (Castleman v. Sagaser (2013) 216 Cal.App.4th 481, 490-491.) Allegations that are merely incidental or collateral to a plaintiffs’ claim are not subject to a motion to strike under section 425.16. (Baral, supra, 1 Cal.5th at 394.) “Allegations of protected activity that merely provide context, without supporting a claim for recovery, cannot be stricken under the anti-SLAPP statute.” (Ibid.)

Here, any (unalleged) communications or petitioning activity do not form the basis of the claim. While Cohen certainly must have communicated with Marinescu to achieve the alleged tort, such communications are incidental to the tort itself. In other words, the speech is not the alleged wrong itself. Instead, the alleged wrong was committing financial elder abuse against James Dutton and Patricia Dutton by “obtaining” and “secreting” a portion of the $427,000. Therefore, the cause of action does not arise from a protected activity.

Cohen asserts that the allegations arise from a protected activity because the payment of funds to maintain litigation is a protected activity. (Sheley v. Harrop (2017) 9 Cal.App.5th 1147, 1166.) Indeed, litigation funding decisions are protected under the anti-SLAPP “insofar as a cause of action is based on the payment of funds to maintain a lawsuit[.]” (Ibid.) In Sheley, the plaintiff sought to recover damages for breach of fiduciary duty, asserting that defendants breached their duty to her by “paying themselves excessive salaries, by wrongfully converting corporate assets, by filing and maintaining a frivolous lawsuit against [her] and by failing to make pro-rata disbursements to [her] as a minority shareholder of the corporation.” (Id.) Here, there are no allegations concerning litigation funding. Even if the funds were used for funding litigation, liability is not premised on the payment of funds to maintain the lawsuit. Thus, the allegations do not arise from the funding of a lawsuit and are not protected on that basis.

Cohen fails to demonstrate that the allegations arise from a protected activity. Accordingly, the motion is DENIED.

A demurrer for sufficiency tests whether the complaint states a cause of action. (Hahn v. Mirda (2007) 147 Cal.App.4th 740, 747.) When considering demurrers, courts read the allegations liberally and in context. In a demurrer proceeding, the defects must be apparent on the face of the pleading or via proper judicial notice. (Donabedian v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994.) A demurrer tests the pleadings alone and not the evidence or other extrinsic matters. Therefore, it lies only where the defects appear on the face of the pleading or are judicially noticed. (CCP §§ 430.30, 430.70.) At the pleading stage, a plaintiff need only allege ultimate facts sufficient to apprise the defendant of the factual basis for the claim against him. (Semole v. Sansoucie (1972) 28 Cal. App. 3d 714, 721.) A “demurrer does not, however, admit contentions, deductions or conclusions of fact or law alleged in the pleading, or the construction of instruments pleaded, or facts impossible in law.” (S. Shore Land Co. v. Petersen (1964) 226 Cal.App.2d 725, 732, internal citations omitted.)

Any party, within the time allowed to respond to a pleading may serve and file a notice of motion to strike the whole or any part thereof. (CCP § 435(b)(1); Cal. Rules of Court, Rule 3.1322(b).) The court may, upon a motion or at any time in its discretion and upon terms it deems proper: (1) strike out any irrelevant, false, or improper matter inserted in any pleading; or (2) strike out all or any part of any pleading not drawn or filed in conformity with the laws of California, a court rule, or an order of the court. (CCP §§ 436(a)-(b); Stafford v. Shultz (1954) 42 Cal.2d 767, 782 [“Matter in a pleading which is not essential to the claim is surplusage; probative facts are surplusage and may be stricken out or disregarded”].)

“Liberality in permitting amendment is the rule, if a fair opportunity to correct any defect has not been given.” (Angie M. v. Superior Court (1995) 37 Cal.App.4th 1217, 1227.) It is an abuse of discretion for the court to deny leave to amend where there is any reasonable possibility that plaintiff can state a good cause of action. (Goodman v. Kennedy (1976) 18 Cal.3d 335, 349.) The burden is on plaintiff to show in what manner plaintiff can amend the complaint, and how that amendment will change the legal effect of the pleading. (Id.)

Defendant Cohen targets the third cause of action on multiple grounds, including that the SAC fails to state sufficient facts, Plaintiff Patricia Dutton lacks standing, Plaintiffs failed to obtain a pre-filing order under Civil Code section 1714.10, the cause is barred by agent immunity rule, and the cause is barred by the applicable statute of limitations.

Welfare and Institutions Code section 15610.30 provides that financial abuse of an elder occurs when a person “(1) Takes, secretes, appropriates, obtains, or retains real or personal property of an elder or dependent adult for a wrongful use or with intent to defraud, or both”, or “(2) Assists in taking, secreting, appropriating, obtaining, or retaining real or personal property of an elder or dependent adult for a wrongful use or with intent to defraud, or both.” (§ 15610.30(a)(1)-(2).) Wrongful use turns on whether the alleged abuser knew or should have known that the taking of an elder’s property is likely to be harmful to the elder. (§ 15610.30(b).)

The SAC alleges that Defendants Barry Edward Cohen operated and practiced law through Barry E. Cohen APC. (SAC ¶159.) Cohen “assisted” Marinescu in committing financial elder abuse against James Dutton and Patricia Dutton by obtaining a portion of the Duttons’ $427,000, secreting a portion of the Duttons’ $427,000, and paying Robert Ouriel from the Duttons’ $427,000. (¶ 160.) Cohen assisted Marinescu in taking, secreting, appropriating, obtaining, or retaining part of the $427,000 for wrongful use or with intent to defraud, or both. (¶ 161.) Plaintiffs wanted their $427,000 returned, but Cohen did not have the slightest concern for their well-being and actively assisted Marinescu in disposing of the $427,000. (¶ 163.) Thus, liability against Cohen depends on allegedly aiding Marinescu in committing financial elder abuse against the Duttons.

“ ‘Liability may ... be imposed on one who¿aids¿and¿abets¿the commission of an intentional tort if the person ... knows the other's conduct constitutes a breach of duty and gives substantial assistance or encouragement to the other to so act....’” [Citation.] This is consistent with Restatement Second of Torts, which recognizes a cause of action for¿aiding¿and¿abetting¿in a civil action when it provides: “For harm resulting to a third person from the tortious conduct of another, one is subject to liability if he [¶] ... [¶] (b) knows that the other's conduct constitutes a breach of duty and gives substantial assistance or encouragement to the other so to conduct himself....” [Citation.] “Advice or encouragement to act operates as a moral support to a tortfeasor and if the act encouraged is known to be tortious it has the same effect upon the liability of the adviser as participation or physical assistance.... It likewise applies to a person who knowingly gives substantial¿aid¿to another who, as he knows, intends to do a tortious act.” [Citation.]

(Schulz v. Neovi Data Corp.¿(2007) 152 Cal.App.4th 86, 93, citations omitted.) Mere knowledge that a tort is being committed, and failing to prevent it, does not constitute aiding and abetting. (Fiol v. Doellstedt (1996) 50 Cal.App.4th 1318, 1325-1326.)

Cohen argues that Patricia Dutton lacks standing because she is not the real party in interest. Under Code of Civil Procedure section 367, "every action must be prosecuted in the name of the real party in interest, except as otherwise provided by statute “Generally, the real party in interest is the person who has the right to sue under the substantive law. It is the person who owns or holds title to the claim or property involved, as opposed to others who may be interested or benefited by the litigation. [Citation.] [¶] Real party in interest issues are often discussed in terms of plaintiff’s ‘standing to sue.’ [Citation.]” (O’Flaherty v. Belgum (2004) 115 Cal.App.4th 1044, 1094.)

Cohen argues that only James Dutton has standing, because he was the one who gave the money to Marinescu, and the money was to be returned to him personally. However, the cited paragraphs do not imply that this money was James Dutton’s separate property. (SAC ¶¶ 28, 29.) The SAC alleges that Marinescu approached Plaintiffs and requested that Plaintiffs give her the sum of $427,000.00. (SAC ¶ 18.) Marinescu concealed the facts from Plaintiffs, because Plaintiffs would not have agreed to furnish the funds. (¶ 24.) Plaintiffs told Marinescu that James would provide Marinescu with $427,000 to deposit into Marinescu’s bank account so that she could prove that she had funds to purchase the 2/3 Interest provided that Marinescu return the $427,000 to James after Marinescu had provided proof of funds to the seller of the 2/3 Interest. (¶ 25.) Based on these facts, the funds were both Plaintiffs, even if James was the one who personally gave through a check. Thus, Patricia does have standing on the alleged facts.[1]

Cohen argues that because liability is based on an abetting/conspiracy theory between himself and his client, Marinescu, Plaintiffs needed to obtain a court order prior to filing the action. Civil Code section 1714.10 requires that a plaintiff obtain a court order before filing an action against an attorney for civil conspiracy with his 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. (Civ. Code § 1714.10(a), (b) [failure to obtain a court order shall be a defense to civil conspiracy].) The court may grant the prefilling order, if plaintiff demonstrates “a reasonable probability that the party will prevail in the action.” (Civ. Code §1714.10(a); see Stueve v. Kahn (2013) 222 Cal.App.4th 327, 332 [conspiracy claims against law firm for allegedly siphoning off clients' assets through fraudulent estate planning did not arise from an “attempt to contest or compromise a claim or dispute,” and thus were not within the prefiling requirement].)

Here, the facts do not reveal such a requirement. Cohen’s liability in assisting Marinescu in committing financial elder abuse does not depend on, or involve, “a contest or compromise a claim or dispute.” The SAC does not premise Cohen’s liability upon his representation of Marinescu. Even if the Court concludes that Cohen was acting as Marinescu’s attorney in the Partition action, there are no facts which suggest that his assistance in the alleged tort was a part of this representation. Even if it were, liability still does not depend on Cohen’s attempt to contest or compromise a claim or dispute.

Therefore, the demurrer is not well-taken. The motion to strike on this same basis is DENIED.

Cohen argues that the agent's immunity rule, in the context of an attorney-client relationship, precludes any claim against the agent-attorney for acting or conspiring to act with the principal-client, unless the attorney acted in furtherance of his or her own gain or caused injury by violating an independent duty owed to the plaintiff.

Defendant argues that the SAC is bereft of any allegation that Cohen acted to further his own interest. The SAC alleges that Cohen transferred money to Ouriel. However, the SAC is also bereft of allegations that the money payments were made in the context of the attorney-client relationship. Like the prefiling order, Cohen only asks the court to notice that he was representing Marinescu in a separate matter at the time. While this may be the case, this fact does not require the Court to conclude that the money payments were subject to the attorney-client relationship or were not for Cohen’s own personal gain. Moreover, the SAC alleges that Cohen “obtained” a portion of the fund, implying that Cohen did personally gain.

Cohen argues that the claim is barred because Plaintiffs did not file this action against him until more than four years after the claim accrued. Further, Cohen’s death did not reset the already expired statute of limitations. (See CCP § 366.2.)

Welf. & Inst. Code section 15657.7 provides that an action for damages for financial elder abuse “shall be commenced within four years after the plaintiff discovers or, through the exercise of reasonable diligence, should have discovered, the facts constituting the financial abuse.” The SAC establishes that the alleged taking of the $427,000 occurred in February-March 2017. Plaintiffs initiated this action in February 2019. Plaintiffs later added Cohen into this suit via the SAC, which was filed on July 22, 2022. Indeed, this is beyond the statutory period. Plaintiffs assert that they may rely on the discovery rule, which is embraced by the statute. However, Plaintiffs do not allege facts showing when Plaintiffs discovered the facts constituting Cohen’s role in the financial abuse.

The Court otherwise agrees with Cohen that the allegations of his assistance with the financial abuse are conclusory. As with all statutory claims, the facts concerning elder abuse must be pleaded with particularity. (Covenant Care, Inc. v. Superior Court (2004) 32 Cal.4th 771, 790; see Khoury v. Maly’s of California, Inc. (1993) 14 Cal.App.4th 612, 619.) Here, the SAC does not describe how Cohen allegedly “assisted” in obtaining, secreting etc., the funds. Accordingly, the demurrer is SUSTAINED with leave to amend.

The Court notes that it would deny the motion as to Civil Code section 1714.10 and Probation Code section 859. As discussed, the SAC does not reveal facts showing that a prefiling order was required. As to the Probation Code remedies, the Court notes that these remedies are available to “an elder” when a defendant “has in bad faith wrongfully taken, concealed, or disposed of property.”

Plaintiff has ten days to file an amended complaint

[1] In their opposition, Plaintiffs rely upon Civil Code section 370. Section 370, however, does not provide for standing. In fact, it implies the opposite. Namely, that the spouse of a married person is not a necessary party to all proceedings. (Civ. Code § 370 [“A married person may be sued without his or her spouse being joined as a party, and may sue without his or her spouse being joined as a party in all actions.”)