Judge: Virginia Keeny, Case: 20VECV01388, Date: 2023-01-13 Tentative Ruling

Case Number: 20VECV01388    Hearing Date: January 13, 2023    Dept: W

MARK A. LIKER v. ELIEZER APPEL, et al.

cross-defendant liker’s special motion to strike fifth and sIXTh causes of action of cross-complainant appel’s cross-complaint pursuant to code of civil procedure section 425.16

Date of Hearing:        January 13, 2023                                Trial Date:       None set.

Department:              W                                                         Case No.:        20VECV01388

Moving Party:            Cross-Defendant Mark A. Liker

Responding Party:     Cross-Complainant Eliezer Appel

BACKGROUND

Plaintiff Mark A. Liker alleges Defendant Eliezer Appel, in his capacity as a California licensed attorney, instructed Plaintiff to purchase certain real property for $250,000.00 to Defendant Cochran Inc. and promised Plaintiff a return on his investment as well as plaintiff would take ownership of the property or that the property would secure Plaintiff’s investment. Plaintiff further alleges Eliezer Appel concealed from Plaintiff the fact that plaintiff did not own the property or the company that took title to the property that is, the Defendant Lockhart Development, Inc., and that Eliezer Appel took Plaintiff’s investment for his own gain.

On November 24, 2020, Plaintiff Mark A. Liker filed a complaint against Defendants Eliezer Appel, Lockhart Development, Inc., and Cochran Inc. asserting a single cause of action for fraud. Plaintiff filed a First Amended Complaint on October 20, 2022, asserting new causes of action – breach of contract, negligent misrepresentation, intentional misrepresentation, and breach of attorney fiduciary duty/duty of loyalty.

On February 11, 2021, Lockhart Development, Inc. filed a cross-complaint against Mark A. Liker asserting causes of action for (1) Breach of Written Contract; (2) Intentional or Negligent Interference with Contractual Relations; (3) Interference with Prospective Economic Advantage; (4) Breach of Fiduciary Duty; (5) Declaratory Relief; (6) Implied Contractual Indemnity; and (7) Slander of Title.

On October 20, 2022, Appel filed a cross-complaint against Liker, the California Neurological Institute, and Avi Marciano asserting causes of action for (1) Violation of Physician’s Medical Practice Act (MPA); (2) Undue Influence (CA Welfare & Institutions Code 15610.70); (3) Negligent Infliction of Extreme Emotional Distress (NIED); (4) Intentional Infliction of Extreme Emotional Distress (IIED); (5) Intentional Interference with Prospective Economic Advantage; and (6) Civil Extortion.     

This action is related to Marc A. Larocque v. Christine Larocque Franz, et al. (LC105233).

[Tentative] Ruling

Cross-Defendant Liker’s Special Motion to Strike Fifth And Sixth Causes of Action of Cross-Complainant Appel’s Cross-Complaint Pursuant to Code of Civil Procedure Section 425.16 is GRANTED, in part.

EVIDENTIARY OBJECTION

Appel submits evidentiary objections, or in the alternative, requests for leave to file a sur-reply as Liker has submitted three declarations with his reply papers from three individuals, none of whom submitted any declarations in connection with the underlying moving papers.

The court sustains Appel’s objection. The general rule of motion practice, which applies here, is that new evidence is not permitted with reply papers. Although this principle is most prominent in the context of summary judgment motions, the same solid logic applies. Specifically, that points raised for the first time would deprive the respondent an opportunity to counter the argument. (Jay v. Mahaffey (2013) 218 Cal.App.4th 1522, 1537.) The three declarations raise new issues not discussed in the moving papers. Specifically, the content of the phone call and conversation with Lopez.

discussion

Cross-Defendant Mark A. Liker brings a special motion to strike pursuant to Code of Civil Procedure section 425.16. Cross-Defendant makes the motion on the grounds the cross-complaint, specifically the fifth cause of action for tortious interference with economic relations and the sixth cause of action for civil extortion, alleges wrongdoing and seeks a remedy for protected statements made in settlement discussions and statements made in connection with other litigation. Liker contends these allegations are protected activities within the meaning of Code of Civil Procedure section 425.16(e) and privileged litigation acts protected within Civil Code section 47.

On a special motion to strike pursuant to Code of Civil Procedure section 425.16, also known as an anti-SLAPP motion, moving parties have the initial burden to demonstrate that a cause of action is subject to a special motion to strike. (Martinez v. Metabolife Inter. Ins. (2003) 113 Cal.App.4th 181, 186; Fox Searchlight Pictures Inc. v. Paladino (2001) 89 Cal.App.4th 294, 304.) First, the court must determine whether moving parties have made a prima facie showing that the attacked claims arise from a protected activity, including defendants’ right of petition, or free speech, under a constitution, in connection with issues of public interest. (Healy v. Tuscany Hills Landscape & Recreation Corp. (2006) 137 Cal.App.4th 1, 5; Soukup v. Law Offices of Herbert Hafif (2006) 39 Cal.4th 260, 278; CCP § 425.16(e).)

If the court finds this showing has been made, it must dismiss the cause of action unless the plaintiff meets its burden to demonstrate a probability of prevailing on the claim. (CCP §425.16(b)(1); Balzaga v. Fox News Network, LLC (2009) 173 Cal.App.4th 1325, 1336.) This means that the plaintiff must state a legally sufficient claim and must then present evidence that substantiates or sustains the claim. (Equilon Enterprises v. Consumer Cause, Inc. (2002) 29 Cal.4th 53, 61; see also Wilson v. Parker, Covert & Chidester (2002) 28 Cal.4th 811, 821 [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”].)

I.                    Defendant’s Burden

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.” (CCP §425.16(e).)

In the cross-complaint, Appel complains that Liker, through his business partner and associate, Avi Marciano, sought to interfere with Appel’s business affairs by contacting Appel’s adversaries in his Mexico litigation and threatening to injure Appel’s interests unless Appel payed Liker what he wanted. Appel alleges Liker engaged in bad faith actions to unreasonably delay, disrupt, and affect the closing of settlement negotiations in the Mexico litigation and injected himself in the litigation to extort and pressure Appel to succumb to his demands. Appel further alleges Marciano contacted him on behalf of Liker to make an offer Appel couldn’t refuse. The offer was to make the complaint against Appel disappear and have Liker refuse to cooperate with the demands for evidence by the California State Bar if Appel met Liker’s financial demands. Appel alleges Liker and Liker’s counsel, Mr. Czech, joined the conversation and confirmed everything Marciano said.

Liker argues the allegations forming Appel’s fifth and sixth causes of action are protected speech. Liker contends while the substance of the actual statements alleged in the fifth cause of action are unclear and convoluted, it is clear that the purported statements were made with regard to pending litigation in Mexico. Moreover, the sixth cause of action is based on actual settlement discussions surrounding Liker’s allegations in the instant case and other pending actions.

In opposition, Appel argues the motion must be denied in its entirety because anti-SLAPP protections do not apply to illegal conduct. Appel contends the “discussions” were not a part of settlement negotiations and instead, threats of public shaming, commandeering State Bar proceedings, and harming children. Appel further argues even if the court found the fifth cause of action for tortious interference was not also based on extortion, the allegations are not based on protected activity as Liker nor anyone connected with him was a party to Appel’s litigation in Mexico, nor were any of them involved in any capacity with his relationships there.

Sixth Cause of Action for Extortion

“The crime of extortion is defined as ‘ “the obtaining of property from another, with his consent ... induced by a wrongful use of force or fear....” (Pen. Code, § 518.) Fear, for purposes of extortion “may be induced by a threat, either: [¶] ... [¶] 2. To accuse the individual threatened ... of any crime; or, [¶] 3. To expose, or impute to him ... any deformity, disgrace or crime.” (Pen. Code, § 519.) “Every person who, with intent to extort any money or other property from another, sends or delivers to any person any letter or other writing, whether subscribed or not, expressing or implying, or adapted to imply, any threat such as is specified in Section 519, is punishable in the same manner as if such money or property were actually obtained by means of such threat.” (Pen. Code, § 523.)’ (Flatley, supra, 39 Cal.4th at p. 326, 46 Cal.Rptr.3d 606, 139 P.3d 2.)” (Malin v. Singer (2013) 217 Cal.App.4th 1283, 1294.)

The court finds the October 19, 2021 telephone “discussion” constituted extortion as a matter of law and is not protected under the anti-SLAPP statute. Appel attests, under penalty of perjury, that Marciano, on behalf of Liker, threatened to amend the State Bar complaint against Appel to include “damning” evidence against him if he did not comply with Liker’s financial demands. (Appel Decl. ¶¶4-6.) Under Flatley, it is the threat to reveal damaging information that makes the conduct illegal when the threat is linked to a monetary demand. The Supreme Court of California there held, “[e]xtortion has been characterized as a paradoxical crime in that it criminalizes the making of threats that, in and of themselves, may not be illegal. ‘[I]n many blackmail cases the threat is to do something in itself perfectly legal, but that threat nevertheless becomes illegal when coupled with a demand for money.’” (Flatley v. Mauro (2006) 39 Cal.4th 299, 326.) In other words, “’[i]t is the means employed [to obtain the money] which the law denounces, and though the purpose may be to collect a just indebtedness arising from and created by the criminal act for which the threat is to prosecute the wrongdoer, it is nevertheless within the statutory inhibition.’”  (Ibid.)

In reply, Liker contends Appel’s declaration is insufficient and offers into evidence the declarations of Mark Liker, Jeffery Czech and Avi Marciano detailing the events surrounding the alleged telephone call that took place around the middle of October 2021. However, the court does not “weigh credibility [nor] compare the weight of the evidence.  Rather, [the court] accepts as true the evidence favorable to the plaintiff and evaluates the defendant’s evidence only to determine if it has defeated that submitted by the plaintiff as a matter of law.”  (Flatley, supra, 39 Cal.4th at p. 326.) Moreover, as noted above, the declarations were submitted for the first time in reply and the court does not consider them as evidence.

Fifth Cause of action for Tortious Interference with Contractual Relations

As for Appel’s fifth cause of action, however, the court finds the alleged interference with Appel’s Mexico litigation does not constitute extortion as a matter of law. Appel contends Marciano, acting on behalf of Liker, offered Lopez (Appel’s ex-business partner and a party to the Mexico litigation) his help to squeeze Appel to accept terms that Lopez wanted in exchange for information about what Appel stands to gain if a settlement in the Mexico litigation was reached or he would impose liens on any transaction involving the Mexico litigation. (Appel Decl. ¶¶11-19.) Appel refers to text messages Marciano sent threatening him, but fails to attach evidence of the text messages. These allegations do not amount to extortion. As noted above, extortion is “obtaining of property . . . from another . . . induced by a wrongful use of force or fear. (Pen. Code, § 518.)” (Flatley v. Mauro (2006) 39 Cal.4th 299, 326.) Appel argues the underlying conduct at issue is nothing more than a continuation of the extortion of Appel by attempting to disrupt his business relationship with a partner in Mexico. However, Appel has not demonstrated how threat of imposing a lien was obtaining property or that he was in fear of being accused of some crime or revelation of some secret. “‘It is the means employed [to obtain the money] which the law denounces, and though the purpose may be to collect a just indebtedness arising from and created by the criminal act for which the threat is to prosecute the wrongdoer, it is nevertheless within the statutory inhibition.’” (Flatley, supra, 39 Cal.4th at p. 326.) Applying this rule to Appel’s fifth cause of action, it is unclear how Maricano’s alleged contact with Lopez and other people Appel might be involved with constitutes extortion.

Appel further argues that even if this cause of action was not based on extortion, the motion must still be denied because it does not implicate protected speech. Appel contends because neither Liker nor anyone connected with him was a party to Appel’s litigation in Mexico, it is absurd for him to argue that any of these statements were made in conjunction with litigation. However, as noted by Liker, there is no requirement in Code of Civil Procedure section 425.16 that the person making the statements be a litigant or connected to the litigation. “Although many anti-SLAPP cases involving prelitigation communications concern demand letters or other statements to adverse parties or potential adverse parties [Citations], there is no such requirement in the text of section 425.16, subdivision (e)(2). That provision has been held to protect statements to persons who are not parties or potential parties to litigation, provided such statements are made “in connection with” pending or anticipated litigation.” (Neville v. Chudacoff (2008) 160 Cal.App.4th 1255, 1270.) Here, Liker contends any statements made to Lopez were protected as they were made with regard to pending litigation in Mexico. Appel admits that Marciano sought information regarding the pending litigation so he could discover what Appel stood to gain if an agreement was reached. (Appel Decl. ¶15.) Appel contends Marciano (and Liker) wanted this information to get leverage on Appel and potentially impose liens on any transaction involving the subject property. (Appel Decl. ¶15.) The court finds the alleged tortious interference with economic relations comes within the litigation privilege. The discussion with Lopez refers to pending litigation between Lopez and Appel and moreover, it seems the discussion also referred to pending litigation between Appel and Liker. Because one of the alleged purposes of the discussion was to discover what Appel stood to gain after settlement of the Mexico litigation, the discussion is “in connection with” judicial proceedings.

Based on the foregoing, the court finds the October 19, 2021 telephone “discussion” is not protected activity within the anti-SLAPP statute’s meaning and because Liker failed to meet his initial burden, the court need not reach the second analytical prong relating extortion. However, because the court finds the Lopez call a protected activity, the court turns to the second prong.

II.                  Plaintiff’s Burden

On the second component of the analysis, courts employ a “summary-judgment-like” procedure, “accepting as true the evidence favorable to the plaintiff and evaluating the defendant’s evidence only to determine whether the defendant has defeated the plaintiff’s evidence as a matter of law.” (Gerbosi v. Gaims, Weil, West & Epstein, LLP (2011) 193 Cal.App.4th 435, 444.) In other words, the court does not assess credibility, and the plaintiff is not required to meet the preponderance of the evidence standard.  The court accepts as true the evidence favorable to the plaintiff, who need only establish that his or her claim has “minimal merit” to avoid being stricken as a SLAPP.  (Soukup, supra, 39 Cal.4th at 291.)

Liker argues the allegations of the cross-complaint that support the claims pled fail because they are all based on allegations involving various litigation matters, litigation in Mexico, the instant litigation, or involve an official complaint filed with the State Bar. Civil Code § 47 (b) provides “A privileged publication or broadcast is one made: (b) in any . . . judicial proceeding.” Liker contends is well settled law that Civil Code section 47 broadly covers and protects litigation activities including statements and pleadings filed as well as communications in settlement regarding the litigation and the State Bar complaint filed by Cross-Defendant.

In opposition, Appel offers an extremely spare declaration as support for his contention he can satisfy the elements of tortious interference with economic relationship.  The sum total of that declaration establishes that he had a partner in Mexico named Lopez with whom he was involved in a long-running dispute; in March 2022, Marciano sent him “threats regarding Lopez and his business dealings in Mexico;” these communications were meant to gain an advantage; and that Marciano sent him text messages telling him that he had spoken with Lopez and other people and that Liker should contact Marciano.  There is also a hearsay statement relayed which the court disregards, relating to statements allegedly made by Marciano to Lopez.  No text messages were attached.  It is unclear why Appel would not provide the text messages in support of his opposition. While the court does not assess the credibility, Appel only provides his declaration that states Marciano reached out to Lopez in order to disrupt Appel’s relationship with Lopez and gain leverage. Appel offers no other evidence in support of his claim.  This evidence in insufficient to establish a prima facie case of intentional interference. 

Accordingly, Liker’s special motion to strike paragraph 18 and the fifth cause of action is GRANTED. Liker may file a separate motion for attorney fees. “[A]ny SLAPP defendant who brings a successful motion to strike is entitled to mandatory attorney fees.”  (Ketchum v. Moses (2001) 24 Cal.4th 1122, 1131 see CCP § 425.16(c).)