Judge Stephen P. Pfahler, Case 21STCV37556 2023-05-08 Tentative Ruling

Judge: Stephen P. Pfahler, Case: 21STCV37556, Date: 2023-05-08 Tentative Ruling

Case Number: 21STCV37556 Hearing Date: May 8, 2023 Dept: F49

Dept. F-49

Date: 5-8-23 (a/f 5-31-23 via 4-4-23 ex parte order)

Case # 21STCV37556

SLAPP

MOVING PARTY: Plaintiffs/Cross-Defendants, Hamid Mirshojae and Woodland Hills Medical Clinic II, Inc.

RESPONDING PARTY: Defendants/Cross-Complainants, Ahang Mirshojae and 5975-5999 Topanga Canyon Blvd.

RELIEF REQUESTED

Special Motion to Strike the First Amended Cross-Complaint

SUMMARY OF ACTION

On October 12, 2021, Plaintiffs Hamid Mirshojae and Woodland Hills Medical Clinic II, Inc. filed a complaint for Breach of Settlement Agreement, Implied Contractual Indemnity, and Breach of Lease against Ahang Mirshojae and 5975-5999 Topanga Canyon Blvd. The subject complaint arises following three separate preceding cases: a January 9, 2017 filed action, Woodland Hills Medical Clinic II, Inc., et al. v. Zelk, et al. (LC105050), a February 3, 2017 and 5975-5999 Topanga Canyon Blvd., et al. v. Zelk, et al. (LC105208), and a March 13, 2019 action, Yadegar v. Woodland Hills Medical Clinic, et al. (19CHCV00214). The LC105208 and LC105050 settled at least in part under an alleged condition that the Ahang, et al. parties “obtain a release” on the 19CHCV00214 action, execute two deeds of trust, as well allowing the clinic to occupy the top floor of the building and parking spaces for business operations. Notwithstanding the agreement, Plaintiffs allege, Ahang, et al. continue to “orchestrate” litigation on the action in order to “extort money from and harass,” and refusal to “approve and sign” the replacement deeds of trust in order to “rectify the defects.” Plaintiffs also dispute the return of certain property belonging to both the business entity and individual. Plaintiffs also allege Defendants refuse to allow the use of the unoccupied top floor or parking spaces “for nefarious reasons.”

On February 24, 2022, Plaintiff 5975-5999 Topanga Canyon Blvd. filed a complaint for unlawful detainer against Defendant, Woodland Hills Medical Clinic II, Inc.

A notice of related cases was filed with 21STCV37556. On March 17, 2022, the court deemed 22VEUD00174 and 21STCV37556 related, thereby leading to the assignment of all cases to Department 47. On March 21, 2022, Plaintiff filed a peremptory challenge, thereby leading to the reassignment of the case to Department 49 on March 22, 2022. On March 28, 2022, the court specially set a motion for reconsideration challenging the preemptory reassignment from Department 47. The motion for reconsideration was denied on June 2, 2022, and the action therefore remains assigned to Department 49.

On September 14, 2022, Ahang Mirshojae and 5975-5999 Topanga Canyon Blvd. answered and filed a cross-complaint for Promissory Fraud, Breach of Contract, Declaratory Relief, and Breach of Fiduciary Duty. On January 30, 2023, the parties stipulated to the filing of a first amended cross-complaint. On February 21, 2023, a nine cause of action for first amended cross-complaint was filed for Promissory Fraud, Fraud, Negligent Misrepresentation, Fraudulent Concealment, Breach of Contract, Breach of Implied Covenant of Good Faith and Fair Dealing, Breach of Fiduciary Duty, Restitution on Unjust Enrichment for Failure of Consideration, and Declaratory Relief.

Meanwhile, on September 20, 2022, the court sustained the demurrer to the unlawful detainer action (22VEUD00174) without leave to amend. Judgment on the unlawful detainer action was entered on October 25, 2022.

RULING: Granted.

Evidentiary Objections: Overruled/Not Considered.

The court in no way considered or relied upon the declarations in opposition and therefore declines to consider the 29 separately articulated objections.

Plaintiffs/Cross-Defendants, Hamid Mirshojae and Woodland Hills Medical Clinic II, Inc. submit the subject special motion to strike the first amended cross-complaint on grounds that the entire operative cross-complaint is barred by the litigation/settlement negotiation/mediation privilege, and Cross-Complainant lacks facts to state any claims against Cross-Defendant. The motion also contends the first amended cross-complaint is barred by the statute of limitations. Defendants/Cross-Complainants, Ahang Mirshojae and 5975-5999 Topanga Canyon Blvd. in opposition contend the mediation privilege is not applicable as to at least the breach of contract, breach of implied covenant of good faith and fair dealing, breach of fiduciary duty, and unjust enrichment claims. The opposition also denies any bar under the statute of limitations. Moving parties in reply notes the concession to protected activity in the first through fourth and ninth causes of action, and maintains the fifth through eighth causes of action also arise from protected activity. Moving parties then reiterate their probability of prevailing on grounds of the litigation privilege, and the statute of limitations.

Timing

“An amended complaint reopens the time to file an anti-SLAPP motion without court permission only if the amended complaint pleads new causes of action that could not have been the target of a prior anti-SLAPP motion, or adds new allegations that make previously pleaded causes of action subject to an anti-SLAPP motion.” (Newport Harbor Ventures, LLC v. Morris Cerullo World Evangelism (2018) 4 Cal.5th 637, 641.) The parties stipulated to the first amended cross-complaint, and the cross-complaint significantly expands the number of causes of action from the prior cross-complaint. Cross-Complainants submitted no challenges to the propriety of the motion either way. The court therefore finds that the entire operative cross-complaint is altered by the new allegations, and therefore subject to a special motion to strike. (Id. at pp. 645–646.)

A special motion to strike must be filed within 60 days from service of the (cross) complaint (with an additional five days under Code of Civil Procedure section 1013(a) for service by mail), or at any later time that the court deems proper. (Code Civ. Proc., § 425.16, subd. (f).) The first amended cross-complaint was filed and served on February 21, 2023. The subject motion was filed and served on March 27, 2023—less than 60 days from the date of service. The motion is therefore timely.

Application of the Anti-SLAPP Statute

Code of Civil Procedure section 425.16 provides that “[a] cause of action against a person arising from any act of that person in furtherance of the person's right of petition or free speech under the United States Constitution or California Constitution in connection with a public issue shall be subject to a special motion to strike unless the court determines that the plaintiff has established that there is a probability that the plaintiff will prevail on the claim.” (Code Civ. Proc. § 425.16, subd. (b).) Such a motion involves a two step analysis, in which the court must first determine whether a movant "has made a threshold showing that the challenged cause of action is one arising from protected activity . . . ." (Taus v. Loftus (2007) 40 Cal.4th 683, 712, quoting Equilon Enterprises v. Consumer Cause, Inc. (2002) 29 Cal.4th 53, 67.) If the court so finds, it must then examine whether the respondent has demonstrated a probability of prevailing on the claim. (Taus v. Loftus, supra, 40 Cal.4th at p. 712.)

An act in furtherance of a person's right to petition or free speech under the United States Constitution or California Constitution includes: “(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.)

The anti-SLAPP applies where the allegations of the defendant’s protected activity are the gravamen or principal thrust of the cause of action. (Peregrine Funding, Inc. v. Sheppard Mulin Richter & Hampton LLP (2005) 133 Cal.App.4th 658, 672 [“‘where a cause of action alleges both protected and unprotected activity, the cause of action will be subject to section 425.16 unless the protected conduct is “merely incidental” to the unprotected conduct’”].) If the allegations of protected activity are only incidental to a claim based essentially on non-protected activity, the mere mention of the protected activity does not subject the claim to an anti-SLAPP motion. (Martinez v. Metabolife International, Inc. (2003) 113 Cal.App.4th 181, 188 [“We conclude it is the principal thrust or gravamen of the plaintiff's cause of action that determines whether the anti-SLAPP statute applies (Citation), and when the allegations referring to arguably protected activity are only incidental to a cause of action based essentially on nonprotected activity, collateral allusions to protected activity should not subject the cause of action to the anti-SLAPP statute”].) .) “[W]hether the defendant's act qualifies as one in furtherance of protected speech or petitioning will depend on whether the defendant took the action for speech-related reasons.” (Wilson v. Cable News Network, Inc. (2019) 7 Cal.5th 871, 889.) “[T]he mere fact that an action was filed after protected activity took place does not mean the action arose from that activity for the purposes of the anti-SLAPP statute. (Citation.) Moreover, that a cause of action arguably may have been ‘triggered by protected activity does not entail it is one arising from such. (Citation.) In the anti-SLAPP context, the critical consideration is whether the cause of action is based on the defendant's protected free speech or petitioning activity.” (Navellier v. Sletten (2002) 29 Cal.4th 82, 89.) Courts must “draw a careful distinction between a cause of action based squarely on a privileged communication … and one based upon an underlying course of conduct evidenced by the communication.” (White v. Western Title Ins. Co. (1985) 40 Cal.3d 870, 888.)

In determining the application of the special motion to strike statute, the court focuses “not on the label of the cause of action,” but on the underlying “activities” alleged in the challenged pleading. (1100 Park Lane Assocs. v. Feldman (2008) 160 Cal.App.4th 1467, 1484.) “If the court determines that relief is sought based on allegations arising from activity protected by the statute, the second step is reached.” (Baral v. Schnitt (2016) 1 Cal.5th 376, 396.) “[A] plaintiff cannot frustrate the purposes of the SLAPP statute through a pleading tactic of combining allegations of protected and nonprotected activity under the label of one ‘cause of action.’” (Fox Searchlight Pictures, Inc v. Paladino (2001) 89 Cal.App.4th 294, 308.) “The anti-SLAPP statute's definitional focus is not the form of the plaintiff's cause of action but, rather, the defendant's activity that gives rise to his or her asserted liability—and whether that activity constitutes protected speech or petitioning.” (Navellier v. Sletten, supra, 29 Cal.4th 82, 92.)

“The anti-SLAPP statute does not apply where protected activity is only collateral or incidental to the purpose of the transaction or occurrence underlying the complaint.” (California Back Specialists Medical Group v. Rand (2008) 160 Cal.App.4th 1032, 1037.) “[T]he mere fact that an action was filed after protected activity took place does not mean the action arose from that activity for the purposes of the anti-SLAPP statute. (Citation.) Moreover, that a cause of action arguably may have been ‘triggered by protected activity does not entail it is one arising from such. (Citation.) In the anti-SLAPP context, the critical consideration is whether the cause of action is based on the defendant's protected free speech or petitioning activity.” (Navellier v. Sletten, supra, 29 Cal.4th at p. 89.)

The Court may look to the litigation privilege as an aid in determining the first step of the anti-SLAPP inquiry. (Flatley v. Mauro (2006) 39 Cal.4th 299, 322-323.) “The litigation privilege in section 47 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. [Citations.]’ [Citation.]” (n (2007) 154 Cal.App.4th 28, 37.) The litigation privilege applies to any and all causes of action except malicious prosecution. (Hagberg v. California Federal Bank FSB (2004) 32 Cal.4th 350, 375.) “A plaintiff cannot establish a probability of prevailing if the litigation privilege precludes the defendant's liability on the claim.” (Digerati Holdings, LLC v. Young Money Entertainment, LLC (2011) 194 Cal.App.4th 873, 888.) Whether the privilege applies is “a factual question that will require evaluation of plaintiffs’ proffered evidence to determine whether they have made a prima facie showing of their ability to negate these factors.” (Birkner v. Lam (2007) 156 Cal.App.4th 275, 286.)

“The ‘[p]leadings and process in a case are generally viewed as privileged communications.’ (Citation.)” (Rusheen v. Cohen, supra, 37 Cal.4th at p. 1058; Navellier v. Sletten, supra, 106 Cal.App.4th at p. 770 [“The privilege generally applies to any communication by a litigant in a judicial proceeding that is made “to achieve the objects of the litigation” and has ‘some connection or logical relation to the action’”].) “[T]he mere fact that an action was filed after protected activity took place does not mean the action arose from that activity for the purposes of the anti-SLAPP statute. (Citation.) Moreover, that a cause of action arguably may have been ‘triggered by protected activity does not entail it is one arising from such. (Citation.) In the anti-SLAPP context, the critical consideration is whether the cause of action is based on the defendant's protected free speech or petitioning activity.” (Navellier v. Sletten, supra, 29 Cal.4th at p. 89.) Courts must “draw a careful distinction between a cause of action based squarely on a privileged communication … and one based upon an underlying course of conduct evidenced by the communication.” (White v. Western Title Ins. Co. (1985) 40 Cal.3d 870, 888.)

Claims based upon statements made in the context of negotiating a settlement fall with the anti-SLAPP statute. (Navellier v. Sletten, supra, 29 Cal.4th at p. 90 [“negotiation and execution of the Release, therefore, involved ‘statement[s] or writing[s] made in connection with an issue under consideration or review by a . . . judicial body….’”]; O&C Creditors Group, LLC v. Stephens & Stephens XII, LLC (2019) 42 Cal.App.5th 546, 568; Suarez v. Trigg Laboratories, Inc. (2016) 3 Cal.App.5th 118, 123 [For purposes of applying the special motion to strike statute, a finding of protected conduct arises “even against allegations of fraudulent promises made during the settlement process”]; Seltzer v. Barnes (2010) 182 Cal.App.4th 953, 963; GeneThera, Inc. v. Troy & Gould Professional Corp. (2009) 171 Cal.App.4th 901, 908; Navarro v. IHOP Properties, Inc. (2005) 134 Cal.App.4th 834, 842.)

The anti-SLAPP statute applies where the allegations of the defendant’s protected activity are the gravamen or principal thrust of the cause of action. (Peregrine Funding, Inc. v. Sheppard Mulin Richter & Hampton LLP (2005) 133 Cal.App.4th 658, 672 [“‘where a cause of action alleges both protected and unprotected activity, the cause of action will be subject to section 425.16 unless the protected conduct is “merely incidental” to the unprotected conduct’”].) If the allegations of protected activity are only incidental to a claim based essentially on non-protected activity, the mere mention of the protected activity does not subject the claim to an anti-SLAPP motion. (Martinez v. Metabolife International, Inc. (2003) 113 Cal.App.4th 181, 188 [“We conclude it is the principal thrust or gravamen of the plaintiff's cause of action that determines whether the anti-SLAPP statute applies (Citation), and when the allegations referring to arguably protected activity are only incidental to a cause of action based essentially on nonprotected activity, collateral allusions to protected activity should not subject the cause of action to the anti-SLAPP statute”].) .) “[T]he mere fact that an action was filed after protected activity took place does not mean the action arose from that activity for the purposes of the anti-SLAPP statute. (Citation.) Moreover, that a cause of action arguably may have been ‘triggered by protected activity does not entail it is one arising from such. (Citation.) In the anti-SLAPP context, the critical consideration is whether the cause of action is based on the defendant's protected free speech or petitioning activity.” (Navellier v. Sletten, supra, 29 Cal.4th at p. 89.) Courts must “draw a careful distinction between a cause of action based squarely on a privileged communication … and one based upon an underlying course of conduct evidenced by the communication.” (White v. Western Title Ins. Co. (1985) 40 Cal.3d 870, 888.)

In determining the application of the special motion to strike statute, the court focuses “not on the label of the cause of action,” but on the underlying “activities” alleged in the challenged pleading. (1100 Park Lane Assocs. v. Feldman (2008) 160 Cal.App.4th 1467, 1484.) “If the court determines that relief is sought based on allegations arising from activity protected by the statute, the second step is reached.” (Baral v. Schnitt (2016) 1 Cal.5th 376, 396.) “The anti-SLAPP statute's definitional focus is not the form of the plaintiff's cause of action but, rather, the defendant's activity that gives rise to his or her asserted liability—and whether that activity constitutes protected speech or petitioning.” (Navellier v. Sletten, supra, 29 Cal.4th at p. 92.)

Each and every cause of action in the operative cross-complaint indisputably arises from the settlement/mediation negotiations. [First Amended Cross-Comp., ¶¶ 1-4, 21-23, 26-27, 29-35, 37-43, 45-51, 53-57, 61-63, 67-68, 73, 80-81, 85, 88.] The first amended cross-complaint does not exist without the settlement agreement and terms. (Park v. Board of Trustees of California State University (2017) 2 Cal.5th 1057, 1068; Rand Resources, LLC v. City of Carson (2019) 6 Cal.5th 610, 621 [“the protected activity must ‘supply elements of the challenged claim’”]; Wilson v. Cable News Network, Inc., supra, 7 Cal.5th at p. 887 [“it must also demonstrate that the activity supplies one or more elements of a plaintiff's claims”].)

Cross-Complainants conclusive argument regarding the lack of applicability of the privilege in the introduction of the opposition lacks any actual legal or factual support in follow-up. In fact cross-complaint even concedes to this by only arguing against application as to the breach of contract, breach of implied covenant of good faith and fair dealing, breach of fiduciary duty, and unjust enrichment claims.

The operative cross-complaint also includes allegations against counsel for cross-defendants, which the court declines to address, as it is not part of any operative allegations against cross-defendants and possibly subject to the litigation privilege as well under different circumstances (see below). [First Amended Cross-Comp., ¶¶ 13-19, 22-23.] The first amended cross-complaint also references alleged breaches to other third parties, which again the court declines to consider. [First Amended Cross-Comp., ¶¶ 25, 27.]

Cross-Complainant can characterize the intent of Cross-Defendants in any way possible, but nothing removes the underlying facts that ALL negotiations and the agreement were entered into as a result of said settlement negotiations. ALL causes of action rely on the same core set of facts, and are therefore subject to the litigation privilege. [First Amended Cross-Comp., ¶¶ 1-4, 21-23, 26-27, 29-35, 37-43, 45-51, 53-57, 61-63, 67-68, 73, 80-81, 85, 88.] (Suarez v. Trigg Laboratories, Inc., supra, 3 Cal.App.5th at p. 123; Seltzer v. Barnes, supra, 182 Cal.App.4th at p. 963; GeneThera, Inc. v. Troy & Gould Professional Corp., supra, 171 Cal.App.4th at p. 907 [“Statements and writings made in connection with litigation are therefore covered by the anti-SLAPP statute, and that statute does not require any showing that the litigated matter concerns a matter of public interest”].)

Fraudulent intent in the negotiations only manifested later in the execution will not remove the action from the settlement negotiation privilege, as argued in opposition. Allowing the argument in opposition seeking a technical distinction between the negotiations themselves and the alleged later conduct articulated in the operative cross-complaint to proceed defeats the purpose of the litigation privilege itself. Cross-Complainants efforts to enforce the agreement will not flow through the dismantling of ingrained public policy. The court therefore finds that Cross-Defendants shift the burden for purposes of a special motion to strike.

Probability of Success on the Merits

The burden now shifts to cross-complainants to demonstrate a “probability” of success on the merits. (Code Civ. Proc., § 425.16(b); Equilon Enterprises LLC v. Consumer Cause, Inc. (2002) 29 Cal.4th 53, 67.). “[A] 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.” (Matson v. Dvorak (1995) 40 Cal.App.4th 539, 548.) “[A]n action may not be dismissed under this statute if the plaintiff has presented admissible evidence that, if believed by the trier of fact, would support a cause of action against the defendant.” (Taus v. Loftus, supra, 40 Cal.4^th at p. 729.) “In deciding the question of potential merit, the trial court considers the pleadings and evidentiary submissions of both the plaintiff and the defendant (§ 425.16, subd. (b)(2)); though 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.” (Wilson v. Parker, Covert & Chidester (2002) 28 Cal.4th 811, 821.)

The evidentiary showing by the plaintiff must be made by competent and admissible evidence. (Morrow v. Los Angeles Unified School District (2007) 149 Cal.App.4th 1424, 1444; Tuchscher Development Enterprises, Inc. v. San Diego Unified Port Dist. (2003) 106 Cal.App.4th 1219, 1236-38.) A verified complaint does not constitute sufficient evidence for establishing a probability of success on the merits. (Comstock v. Aber, supra, 212 Cal.App.4^th at p. 950; Thayer v. Kabateck Brown Kellner LLP (2012) 207 Cal.App.4th 141, 160.)

Cross-Defendants contend the actions are barred by the litigation privileges arising from the proceeding. “The litigation privilege in section 47 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. [Citations.]’ [Citation.]” (Rohde v. Wolf (2007) 154 Cal.App.4th 28, 37.) The litigation privilege applies to any and all causes of action except malicious prosecution. (Hagberg v. California Federal Bank FSB (2004) 32 Cal.4^th 350, 375.) “A plaintiff cannot establish a probability of prevailing if the litigation privilege precludes the defendant's liability on the claim.” (Digerati Holdings, LLC v. Young Money Entertainment, LLC (2011) 194 Cal.App.4th 873, 888.) Whether the privilege applies is “a factual question that will require evaluation of plaintiffs’ proffered evidence to determine whether they have made a prima facie showing of their ability to negate these factors.” (Birkner v. Lam (2007) 156 Cal.App.4th 275, 286.)

Cross-Complainants in opposition again reiterate their legally and factually unsupported argument against the “mediation privilege,” and maintain the litigation privilege only applies to items within a “judicial proceeding.” Cross-Complaint also denies “fraud” allegations protect a party within the litigation privilege on the basis that said fraudulent representations were not “logically related or connected to the underlying suit.”

As addressed above, the subject argument again raises the issue of whether any allegedly wrongful conduct by Defendants occurred outside the scope of the participation of the litigation. The court continues to find the gravamen of the action arises from the settlement negotiations, and said representations in the negotiations are protected. [First Amended Cross-Comp., ¶¶ 1-4, 21-23, 26-27, 29-35, 37-43, 45-51, 53-57, 61-63, 67-68, 73, 80-81, 85, 88.]

“The ‘[p]leadings and process in a case are generally viewed as privileged communications.’ (Citation.)” (Rusheen v. Cohen, supra, 37 Cal.4th at p. 1058.) Courts previously found the litigation privilege applicable in cases of a false declaration in association with a proof of service, a forged will, and a forged building permit. (Rusheen v. Cohen, supra, 37 Cal.4th at pp. 1058-1059; Steiner v. Eikerling (1986) 181 Cal.App.3d 639, 641-642; Pettitt v. Levy (1972) 28 Cal.App.3d 484, 488-489.) Consistent with the findings in the burden shifting portion of the action, the court finds the litigation privilege also bars any showing of a probability of success on the merits. Furthermore, as referenced above, even if Cross-Complainants contend counsel somehow was also at fault, all conduct occurred within the context of moving defendants representing their clients. (Optional Capital, Inc. v. Akin Gump Strauss, Hauer & Feld LLP (2017) 18 Cal.App.5th 95, 113 [“It is well established that the protection of the anti-SLAPP statute extends to lawyers and law firms engaged in litigation-related activity”].)

The court declines to consider the statute of limitations arguments and independent challenges to the breach of fiduciary duty argument. The burden shifted under the litigation privilege arguments, and the court additionally finds the litigation privilege bars the action without further consideration.

Cross-Complainants continued efforts seeking relief and/or retribution arising from the three prior actions, plus the now dismissed unlawful detainer complaint cannot disregard legal precedent intended to protect against the subject serial litigation intended to drive up costs, harass, and burden all those involved. The subject cross-complaint continues with the pattern of continuous collateral challenges to the prior action. The special motion to strike is granted in its entirety. Prevailing parties may file a separate motion for attorney fees.

Although new counsel substituted into the case, the court continues with its prior policy unique to this case: The court refers the parties to the court operated website for any and all future motion hearing dates, and will no longer list any future dates to cases involving these parties.

Cross-Defendants to give notice.