Judge: Richard Y. Lee, Case: 30-2020-01150194, Date: 2023-06-15 Tentative Ruling

Defendant Jeffrey S. Benice (“Defendant”) moves to strike the First Amended Complaint of Plaintiff CardConnect, LLC (“Plaintiff”) on the ground that Plaintiff failed to obtain a court order allowing Plaintiff to assert a civil conspiracy claim against Defendant, an attorney, as required by Code of Civil Procedure section 1714.10(a).

A party filing a motion to strike is required to meet and confer in person or by telephone with the party who filed the pleading subject to the motion to strike and must file and serve with a motion to strike a declaration concerning the meet and confer, pursuant to Code of Civil Procedure section 435.5.

Here, Defendant has filed no declaration showing that the required meet and confer in person or by telephone occurred.  Further, Plaintiff’s counsel’s declaration demonstrates that her attempts to meet and confer regarding this Motion to Strike went ignored by Defense counsel.  (Declaration of Marta Roza, Ex. E.) 

Nevertheless, the Court exercises its discretion and rules on the merits as set forth below:

Code of Civil Procedure section 1714.10 states that no cause of action against an attorney for a civil conspiracy with his or her 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 shall be included in a complaint unless the court enters an order allowing the pleading after the court determines that the party seeking to file the pleading has established a reasonable probability that the party will prevail in the action.

Code of Civil Procedure section 1714.10 does “not apply to a cause of action against an attorney for a civil conspiracy with his or her client, where (1) the attorney has an independent legal duty to the plaintiff, or (2) the attorney’s acts go beyond the performance of a professional duty to serve the client and involve a conspiracy to violate a legal duty in furtherance of the attorney’s financial gain.”  (Code Civ. Proc., § 1714.10(c).)

“ The purpose of section 1714.10 is to discourage frivolous claims that an attorney conspired with his or her client to harm another. Therefore, rather than requiring the attorney to defeat the claim by showing it is legally meritless, the plaintiff must make a prima facie showing before being allowed to assert the claim.”  (Klotz v. Milbank, Tweed, Hadley & McCloy (2015) 238 Cal.App.4th 1339, 1350.) 

“The first exception to section 1714.10 the independent duty exception, ‘obviously speaks to a relationship beyond that of attorney-client.’  [Citation.]  An independent legal duty may also arise when an attorney engages in conduct that goes ‘way beyond the role of [a] legal representative.’ ”  (Id. at p. 1351.)  “[A]n attorney has an independent legal duty to refrain from defrauding nonclients.”  (Ibid.)

Benice requests judicial notice of the Answer filed in a separate case, Ignite Payments LLC v. At Your Request Ticket and Concierge Service, LLC, et al., Orange County Case No. 30-2019-01042138, on 03/01/2019.  The request is GRANTED pursuant to Evidence Code section 452(d).  The caption page of the Answer shows Benice acted as the attorney for Defendants At Your Request Ticket and Concierge Service, LLC and himself in the Ignite action.

The FAC alleges that in June 2016, Defendants Shield, Huang, Benice, and Schultz entered into an agreement whereby Shields and Huang would permit Benice and/or Schultz to charge Shields’ and Huang’s credit cards for the price of tickets for sporting events; Benice and Schultz would resell the tickets to third parties for a profit; Benice and Schultz would pay the credit card charges made to the accounts of Shields and Huang; and all four would share the profits from the resale of the tickets.  (FAC ¶ 8.)  Shields and Huang also charged back the credit card charges they had authorized Benice and Schultz to make by falsely claiming that those charges were not authorized.  (FAC ¶ 10.)  Plaintiff, having advance payments to At Your Request, in the normal course of business would have been paid by the credit card issuers of Shields and Huang, but because of their nonpayment and false chargebacks, Plaintiff was unable to receive payment.  (FAC ¶ 12.)

As to Benice, the FAC alleges that Benice and Schultz made representations that each of the charges presented to Plaintiff for payment were valid charges that arose from transactions between a bona fide cardholder and At Your Request and/or transactions arising from bona fide purchases of goods and services in the ordinary course of At Your Request’s business.  (FAC ¶ 22.)  Those representations were false and the transactions were not genuine sales but part of a joint venture between Defendants to use their credit cards to purchase tickets that would be later resold for a profit.  (FAC ¶ 23.)

Based on the allegations, Code of Civil Procedure section 1714.10 does not apply.  Plaintiff does not assert a cause of action for civil conspiracy.  Instead, its causes of action are for fraud, which do not fail under the Motion to Strike.  (See Klotz, supra, 238 Cal.App.4th at p. 1349 [holding, with respect to demurrer based on section 1714.10, that “those claims that are not conspiracy claims would survive the demurrer”].)  Further, section 1714.10 only applies to actions “arising from any attempt to contest or compromise a claim or dispute and which is based upon the attorney’s representation of the client.”  There has been no showing that this action arises from Benice’s attempt to contest or compromise a claim or dispute or is based upon Benice’s representation in the Ignite action.

Moreover, the first exception to section 1714.10 applies.  As discussed above, attorneys have an independent legal duty to refrain from defrauding nonclients.  Any fraudulent acts taken by an attorney, such as those alleged in the FAC, cannot be claimed to be the “normal services of an attorney” that are intended to be protected by the statute.  (See id. at p. 1351.)  Instead, the fraud allegations relate to an independent duty owed by Benice to Plaintiff.

Notably, the allegations relate to an alleged fraudulent agreement from 2016.  Benice has not shown that he represented any of the other defendants in this action during that relevant time period.

Thus, the Court finds that Code of Civil Procedure section 1714.10 does not apply.  Accordingly, the Motion to Strike is DENIED.

Defendant to file an answer to the FAC within 20 days.

The Case Management Conference is continued to 7/13/2023 at 1:30 p.m.

Defendant to give notice.