Judge: Teresa A. Beaudet, Case: 21STCV38823, Date: 2022-08-03 Tentative Ruling

Case Number: 21STCV38823    Hearing Date: August 3, 2022    Dept: 50

Superior Court of California

County of Los Angeles

Department 50

Background

On October 21, 2021, Plaintiffs 800 E. Pico Blvd., LLC (“Pico LLC”) and Xiang Hao Cui (“Cui”) (jointly, “Plaintiffs”) filed this action against Defendants Online Edugo, Inc. (“Edugo”), Andrew Kim (“Kim”) and Law Office of Andrew Kim, APC (“Law Office”) (collectively, “Defendants”). The Complaint asserts one cause of action for wrongful use of civil proceedings. On January 20, 2022, the Court issued an Order denying Kim and the Law Office’s special motion to strike.

Edugo now moves to strike the Complaint pursuant to Code of Civil Procedure section 425.16. Plaintiffs oppose.[1]

Evidence

The Court grants Edugo’s request for judicial notice filed in support of the motion as to Exhibits 1-3. The Court also grants Plaintiffs’ request for judicial notice.

The Court denies Edugo’s request for judicial notice filed in support of the reply, and sustains Plaintiffs’ objection thereto. The Court also sustains Plaintiffs’ objection to the exhibit attached to the reply brief. As Plaintiffs note, “[t]he general rule of motion practice…is that new evidence is not permitted with reply papers.” (Jay v. Mahaffey (2013) 218 Cal.App.4th 1522, 1537.)

The Court rules on Plaintiffs’ evidentiary objections to the Declaration of Andrew Kim as follows:

Objection 1: overruled

Objection 2: overruled

Objection 3: overruled except as to the reference to “henchmen”

Objection 4: sustained as to “[t]he court found the lawsuit meritorious,” overruled as to the remainder. 

Objection 5: overruled

Objection 6: overruled  

Objection 7: overruled

The Court rules on Plaintiffs’ evidentiary objections to the Declaration of Connie Kim as follows:

Objection 1: overruled

Objection 2: overruled

Objection 3: overruled

Objection 4: sustained as to “the test-takers were disturbed while taking the exams by the loud noise he made,” overruled as to the remainder.

Objection 5: overruled

Objection 6: overruled

Objection 7: sustained

Objection 8: overruled

Objection 9: overruled

Objection 10: sustained as to “the inability to use the onsite parking facility was causing great deal of distress on the part of arriving patrons, most of whom did not know the area very well,” overruled as to the remainder

Objection 11: overruled

Objection 12: sustained as to “[t]he court found the lawsuit meritorious,” overruled as to the remainder. 

Objection 13: overruled

Discussion

The anti-SLAPP statute is “a mechanism through which complaints that arise from the exercise of free speech rights can be evaluated at an early stage of the litigation process and resolved expeditiously.” (Simmons v. Allstate Ins. Co. (2001) 92 Cal.App.4th 1068, 1073 [internal quotations omitted].) Courts use a two-step process for determining whether an action is a strategic lawsuit against public participation, or a SLAPP. First, the court determines whether the defendant has established that the challenged claim arises from protected speech. (Equilon Enterprises v. Consumer Cause, Inc. (2002) 29 Cal.4th 53, 67.) If such a showing has been made, the court “determines whether the plaintiff has demonstrated a probability of prevailing on the claim.” (Ibid.)

A.    Prong One – Arising from Protected Activity

“[T]he only thing the defendant needs to establish to invoke the protection of the SLAPP statute is that the challenged lawsuit arose from an act on the part of the defendant in furtherance of her right of petition or free speech.” (Fox Searchlight Pictures, Inc. v. Paladino (2001) 89 Cal.App.4th 294, 307.)

An act in furtherance of a person’s right of petition or free speech includes 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.

(Code Civ. Proc., § 425.16, subd. (e).)

In determining whether a cause of action arises from protected conduct, the court focuses 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.) “[T]he 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 (emphasis in original).) In making this determination, the Court considers “the pleadings, and supporting and opposing affidavits stating the facts upon which the liability or defense is based.” (Ibid.)

Allegations of the Complaint

In the Complaint, Plaintiffs allege that Edugo entered into a commercial lease agreement (“Lease”) with 800 E. Pico Blvd., LLC (“Pico LLC”) for 810 E. Pico Blvd., Unit 311, Los Angeles, CA 90021, and that the Lease provided for one assigned parking space. (Compl., ¶ 13.) Edugo is a computerized testing center that proctors exams for licensing, such as for teaching, counseling, nursing, and other professions. (Compl., ¶ 12.) Cui was not a party to the Lease. (Compl., ¶ 14.)

On or about March 15, 2020, Edugo closed its business due to Los Angeles County’s order to close non-essential businesses to mitigate the COVID-19 pandemic, and during this time, Edugo did not pay rent to Pico LLC. (Compl., ¶ 16.) At some point in October 2020, Edugo and Pico LLC agreed to resolve the delinquent rent by a lump sum payment of $10,000, and agreed that thereafter rent would be reduced to $1,800 per month. (Compl., ¶¶ 18, 26, Ex. 1.) Edugo then had to close again on December 1, 2020 due to a second pandemic-related closure order. (Compl., ¶¶ 18, 26, Ex. 1.)

On April 14, 2021, Edugo filed an action against Jane’s Management Systems, LLC and its owner John Ko, Pico LLC, Cui (owner and member of Pico LLC), Win Security and its owners Jenny Cho and Moon Hee Cho, and Metro Parking, Inc. and its owner Gab Jea Cho. (Compl., ¶¶ 20, Edugo’s RJN, Ex. 1.) Edugo’s lawsuit, Online Edugo, Inc. v. 800 E. Pico Blvd., LLC, et al., Case No. 21STCV14159,  alleged causes of action for breach of contract, breach of the implied covenant of good faith and fair dealing, retaliatory wrongful eviction, and preliminary and permanent injunction (the “Lease Action”). (Compl., ¶ 25; Edugo’s RJN, Ex. 1.) Kim and the Law Office represented Edugo in the Lease Action. (Edugo’s RJN, Ex. 1.) In the Lease Action, Edugo alleged that Pico LLC, by and through Cui, called Edugo five to seven times per week about rent, and that the calls continued until the end of March 2021, even though Edugo’s representative asked Cui to stop calling. (Edugo’s RJN, Ex. 1.) The testing center reopened on April 1, 2021, and on that date, Ko came to Edugo’s test center and threatened Edugo to pay rent by 9 a.m., the same day. (Edugo’s RJN, Ex. 1.) Edugo also alleged that when test-takers arrived to park, Metro Parking and Cho falsely told them Edugo’s test center had been closed, and test takers were turned back or forced out from the parking lot. (Edugo’s RJN, Ex. 1.)

On June 15, 2021, Plaintiffs filed a demurrer and motion to strike the complaint in Edugo’s Lease Action. (Compl., ¶ 26.) On September 13, 2021, the Honorable Stephen I. Goorvitch sustained Plaintiffs’ demurrer to each of the causes of action in the complaint without leave to amend. (Compl., ¶ 26, Ex. 1.)

In the instant action, Plaintiffs allege that Defendants initiated the Lease Action against Plaintiffs for an improper purpose and with a malicious intent. (Compl., ¶ 33.) Plaintiffs assert that Defendants sued them for two contract claims despite attaching a lease to its complaint that Cui was not a party to. (Ibid.) Plaintiffs also allege that Defendants had no foundation for their retaliatory eviction claim, and that Defendants acknowledged that the Lease Action was filed to get free rent and free parking. (Ibid.) Plaintiffs assert that Kim pursued a temporary restraining order against Plaintiffs knowing they were not responsible for management of the parking lot. (Ibid.)

Statements in Connection with Anticipated or Pending Official Proceedings

Edugo contends that Plaintiffs’ single cause of action for wrongful use of civil proceedings[2] arises from statements protected under Code of Civil Procedure section 425.16, subdivision (e)(1) (“any written or oral statement or writing made before a legislative, executive, or judicial proceeding, or any other official proceeding authorized by law”). It is well-settled that “[t]he constitutional right of petition encompasses ‘the basic act of filing litigation.’” (Navellier v. Sletten, supra, 29 Cal.4th at p. 90.) In addition, “[t]he plain language of the anti-SLAPP statute dictates that every claim of malicious prosecution is a cause of action arising from protected activity because every such claim necessarily depends upon written and oral statements in a prior judicial proceeding.” (Area 55, LLC v. Nicholas & Tomasevic, LLP (2021) 61 Cal.App.5th 136, 151.) Therefore, the Court finds that the burden now shifts to Plaintiffs on prong two. (See Baral v. Schnitt (2016) 1 Cal.5th 376, 396 [“[i]f the court determines that relief is sought based on  allegations arising from activity protected by the statute, the second step is reached”].)

B.    Prong Two – Probability of Prevailing

On prong two of the anti-SLAPP analysis, 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.” (Premier Medical Management Systems, Inc. v. California Ins. Guarantee Assn. (2006) 136 Cal.App.4th 464, 476 [internal quotations omitted].) In making the prong two 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).) “The court does not, however, weigh [defendant’s] evidence against the plaintiff’s, in terms of either credibility or persuasiveness. Rather, the defendant’s evidence is considered with a view toward whether it defeats the plaintiff’s showing as a matter of law, such as by establishing a defense or the absence of a necessary element.” (1-800 Contacts, Inc. v. Steinberg (2003) 107 Cal.App.4th 568, 585.)

 “A plaintiff must plead and prove three elements to establish the tort of malicious prosecution: a lawsuit (1) was commenced by or at the direction of the defendant and was pursued to a legal termination favorable to the plaintiff; (2) was brought without probable cause; and (3) was initiated with malice.” (Nunez v. Pennisi (2015) 241 Cal.App.4th 861, 872–873 [internal quotations omitted].) 

The issuance of a preliminary injunction “conclusively establishes probable cause for bringing the underlying causes of action.” (Fleishman v. Superior Court (2002) 102 Cal.App.4th 350, 357; see also Fleishman v. Superior Court (2002) 102 Cal.App.4th 350, 355 [“If the denial of an anti-SLAPP motion based on the action’s potential merit conclusively establishes probable cause for the action, the issuance of a preliminary injunction must have the same effect.”].) 

Here, Edugo sought and obtained a preliminary injunction in the underlying Lease Action, which enjoins Plaintiffs from refusing to allow Edugo’s patrons to park in the garage. (Edugo’s RJN, Exs. 2, 3.) Because the issuance of a preliminary injunction against Plaintiffs conclusively establishes that Defendants’ underlying Lease Action was brought with probable cause, Plaintiffs here cannot demonstrate the probable validity of their cause of action for wrongful use of civil proceedings.    

In their opposition, Plaintiffs note that the Court in this action issued an Order on January 20, 2022 denying Kim and the Law Office’s special motion to strike. As Edugo acknowledges, Kim and the Law Office’s motion filed on December 13, 2021 in this action (as well as the reply in support of the motion filed on January 13, 2022) did not cite to Fleishman v. Superior Court (2002) 102 Cal.App.4th 350, or otherwise cite to any legal authority indicating that the issuance of a preliminary injunction conclusively establishes probable cause for bringing the underlying causes of action. (See Reply at p. 2:16-18, “defendants in its motion fail to inform the court of [Fleishman].”)

As Plaintiffs note, in Fleishman, the Court of Appeal held that “where, as here, all causes of action are reasonably related to the preliminary injunction, the granting of injunctive relief conclusively establishes that each cause of action was brought with probable cause.” (Fleishman v. Superior Court, supra,102 Cal.App.4th 350, 358.) Plaintiffs assert that Edugo fails to explain what claims in the underlying Lease Action fall under the preliminary injunction, and that it is Edugo’s burden to do so on this motion. Plaintiffs cite to Bently Reserve LP v. Papaliolios (2013) 218 Cal.App.4th 418, 434, where the Court of Appeal found that “[w]hen evaluating an affirmative defense in connection with the second prong of the analysis of an anti-SLAPP motion, the court, following the summary-judgment-like rubric, generally should consider whether the defendant’s evidence in support of an affirmative defense is sufficient, and if so, whether the plaintiff has introduced contrary evidence, which, if accepted, would negate the defense.” The Court notes that Edugo did not file an answer to the Complaint in this action, and thus does not assert the preliminary injunction as an affirmative defense in any answer. In any event, Edugo submitted the preliminary injunction issued in the underlying Lease Action in connection with its request for judicial notice. The Court also finds that the causes of action in the Lease Action for breach of contract; breach of implied covenant of good faith and fair dealing; retaliatory wrongful eviction; and preliminary and permanent injunction are reasonably related to the parking issue. These claims arise from the denial of parking access and the request for a preliminary injunction is framed in these terms.  

Lastly, in its reply, Edugo requests that the Court reconsider its January 20, 2022 Order in this action in light of Fleishman. The Court notes that it is not appropriate to address this request via the instant motion. Edugo must file a separately noticed motion if reconsideration is sought. 

Conclusion

Based on the foregoing, Edugo’s special motion to strike is granted. Edugo is ordered to provide notice of this Order. 

DATED:  August 3, 2022                               ________________________________

Hon. Teresa A. Beaudet

Judge, Los Angeles Superior Court