Judge: Shirley K. Watkins, Case: 22VECV00509, Date: 2022-07-29 Tentative Ruling

Case Number: 22VECV00509    Hearing Date: July 29, 2022    Dept: T

RONALD HAGEN,

 

                        Plaintiff,

 

            vs.

 

FACECAKE MARKETING TECHNOLOGIES, INC.; et al.

 

                        Defendants.

 

CASE NO:  22VECV00509

 

[TENTATIVE] ORDER RE:

SPECIAL MOTION TO STRIKE DEFENDANT’S CROSS-COMPLAINT

 

Dept. T

8:30 a.m.

July 29, 2022

 

            [TENTATIVE] ORDER:  The Special Motion to Strike Defendant’s Cross-Complaint is DENIED.

 

  1. Introduction

    Plaintiff/Cross-Defendant Ronald Hagen (“Hagen”) moves for a court order striking each of the causes of action asserted in Defendant/Cross-Complainant FaceCake Marketing Technologies, Inc.’s (“FaceCake”) cross-complaint pursuant to CCP § 425.16.  FaceCake’s cross-complaint asserts causes of action for (1) abuse of process – wrongful attachment and (2) fraud – intentional misrepresentation.

     

  2. Request for Judicial Notice

    Hagen requests judicial notice of the webpages retrieved from FaceCake’s website pursuant to CCP § 452(h).

    The Court finds webpages from FaceCake’s website are not judicially noticeable under CCP § 452(h) because information on websites can be reasonably subject to dispute.  (Huitt v. Southern California Gas Co. (2010) 188 Cal.App.4th 1586, 1605 fn. 10 (“Simply because information is on the Internet does not mean that it is not reasonably subject to dispute.”).)  Hagen’s request is denied.

     

  3. Discussion

    First Cause of Action for Abuse of Process

    In opposition, FaceCake indicates that it has stipulated to striking its first cause of action for abuse of process.  Hagen has confirmed this stipulation on reply.

    A review of the Court’s records shows that no stipulation has been submitted striking the first cause of action.  The Court will thus inquire with the parties regarding the stipulation at the hearing.

    Second Cause of Action for Fraud

    Hagen argues FaceCake’s fraud cause of action is protected under CCP § 425.16 as statements made in anticipation of a court action or in relation to a judicial proceeding.

    “Statements made ‘in anticipation of a court action’ may be entitled to protection under the anti-SLAPP statute.”  (Trinity Risk Management, LLC v. Simplified Labor Staffing Solutions, Inc. (2021) 59 Cal.App.5th 995, 1005.)  “‘‘[J]ust as communications preparatory to or in anticipation of the bringing of an action or other official proceeding are within the protection of the litigation privilege . . . [,] such statements are equally entitled to the benefits of section 425.16.’’”  (Id. (quoting Briggs v. Eden Council for Hope & Opportunity (1999) 19 Cal.4th 1106, 1115) (alteration in original).)  “A prelitigation communication is privileged only if it ‘relates to litigation that is contemplated in good faith and under serious consideration.’”  (Id. (quoting Action Apartment Assn., Inc. v. City of Santa Monica (2007) 41 Cal.4th 1232, 1251).)

    Here, FaceCake’s fraud cause of action is premised on statements Hagen and his attorney, Marshall Stagg (“Stagg”), allegedly made throughout the parties’ negotiations regarding the Note extension.  (Cross-Complaint, ¶ 44.)  FaceCake alleges that, on March 10, 2022, Stagg indicated to FaceCake that Hagen would agree to extend his Note and included proposed requests by Hagen.  (Id.)  FaceCake alleges that both Hagen and Stagg “knowingly and intentionally misrepresented to FaceCake Hagen’s intentions in continuing to engage in negotiations regarding the Note extension,” that they “misrepresented to FaceCake that their continuing discussions were made in good faith,” and that, in actuality, “Hagen never intended to reach an agreement with FaceCake regarding an extension on the Note, and only continued to engage in discussions with FaceCake for the purpose of attaining proprietary information regarding FaceCake’s business, specifically its intellectual property assets.”  (Id., ¶ 45.)  Based on these allegations, there are no indications any purported misrepresentations made by Hagen, either directly or through Stagg, were made in anticipation of litigation or in relation to a judicial proceeding.

    The incorporated allegations also provide no indications that the alleged misrepresentations were made in anticipation of litigation or in direct relation to a judicial proceeding.  FaceCake alleges that Hagen “expressed his desire to aggressively pursue FaceCake’s patents because of their significant value” and made statements “indicating his desire to ‘go after’ FaceCake’s assets.”  (Cross-Complaint, ¶¶ 33, 34, 43.)  However, these allegations are insufficient to show that Hagen made the purported misrepresentations to obtain information on FaceCake’s intellectual property assets to use in his action against FaceCake.  In fact, Hagen declares that the information he was provided about FaceCake’s intellectual property assets was only for the sole purpose of analyzing his potential investment in FaceCake.  (Motion, Hagen Decl., ¶ 11.)  This demonstrates that the information was not obtained by Hagen to use in his action against FaceCake.  Hagen has thus failed to establish the alleged misrepresentations are protected under CCP § 425.16(e)(1) or (e)(2).

    Hagen also argues that the purported statements pertain to issues of public interest and are thus protected under CCP § 425.16(e)(4).  Hagen has failed to demonstrate that the misrepresentations on which FaceCake’s fraud claim is based pertain to issues of public interest.

    Hagen argues that FaceCake’s financial stability is a matter of public interest because FaceCake promotes itself in a broad, wide-ranging manner to consumers and investors across the country.  Hagen relies on information set forth on FaceCake’s website to support his argument.  As the request for judicial notice of FaceCake’s webpages has been denied, Hagen’s argument regarding FaceCake’s promotion of itself to consumers and investors is unsupported.

    Even assuming FaceCake’s financial stability is a matter of public interest, Hagen has failed to show that the alleged misrepresentations pertain to FaceCake’s financial stability.  “[T]here must be ‘some degree of closeness between the challenged statements and the asserted public interest.’”  (Woodhill Ventures, LLC v. Yang (2021) 68 Cal.App.5th 624, 632 (quoting Weinberg v. Feisel (2003) 110 Cal.App.4th 1122, 1132) (emphasis in original).)  “A tangential relationship is not enough.”  (Id.)

    As discussed, FaceCake’s fraud claim is premised on Hagen’s alleged misrepresentations regarding his intentions in continuing discussions regarding an extension of the Note—i.e., Hagen never intended to reach an agreement to extend the Note and only continued such discussions for the purpose of attaining information regarding FaceCake’s business and intellectual property assets.  (Cross-Complaint, ¶¶ 44-45.)  As pled, Hagen’s alleged misrepresentations were made to obtain information about FaceCake’s intellectual property assets, which, according to Hagen’s declaration, was for the purpose of analyzing his own potential investment in FaceCake.  The statements do not pertain to FaceCake’s financial stability.  The Court notes that there are also no indications from the cross-complaint that FaceCake’s financial stability depends on an extension of the Note such that the misrepresentations could be construed to relate to an issue of financial stability.  In fact, FaceCake has pled that Hagen’s Note represents a small fraction of FaceCake’s capitalization.  (Cross-Complaint, ¶¶ 12, 43.)  There is thus no degree of closeness between the purported misrepresentations and Hagen’s asserted public interest issue regarding FaceCake’s financial stability.  Hagen has not demonstrated the statements giving rise to FaceCake’s fraud cause of action are protected under CCP § 425.16(e)(4).

    As Hagen has failed to meet his burden of establishing FaceCake’s fraud claim arises out of protected activity, the burden has not shifted to FaceCake to demonstrate a probability of success on the merits.

                Based on the foregoing, the special motion to strike is denied.

    Attorney’s Fees and Costs

    As the special motion to strike is denied, Hagen’s request for attorney’s fees and costs is also denied.