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ANNEN v. BUTZ DUNN & DESANTIS, D071182. (2017)

Court: Court of Appeals of California Number: incaco20170919057 Visitors: 22
Filed: Sep. 19, 2017
Latest Update: Sep. 19, 2017
Summary: NOT TO BE PUBLISHED IN OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. HUFFMAN , J. Richard J. Annen appeals from an order granting a special motion to strike under the anti-SLAPP statute (Code of Civ. Proc., 425.16) 1 i
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NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

Richard J. Annen appeals from an order granting a special motion to strike under the anti-SLAPP statute (Code of Civ. Proc., § 425.16)1 in favor of defendants Butz Dunn & DeSantis, Douglas Butz and Bradley Lebow. We conclude that Annen's challenge to the trial court's order granting the special motion to strike is without merit, and we accordingly affirm the order.

I.

FACTUAL AND PROCEDURAL BACKGROUND

A. Professional Malpractice Insurance Coverage Issues Arise During Dissolution of Law Firm

Annen and Richard Sparber (Sparber) were the only shareholders in the law firm of Sparber Annen Morris & Gabriel (SAMG). By 2014 they were considering winding up and dissolving SAMG due to numerous disputes and disagreements between them.

Toward this end, in May 2014, an attorney hired by Sparber notified Annen that he had been retained to represent Sparber in the dissolution of the firm and "potential litigation" arising out of it, including a voluntary windup proceeding to be filed in superior court pursuant to Corporations Code section 1904 and a possible shareholder derivative action. On December 24, 2014, Douglas Butz of Butz Dunn & DeSantis e-mailed Annen to advise him that in place of Sparber's earlier attorney, his firm was now representing Sparber in connection with the winding up and dissolution of SAMG. Butz stated that, if possible, he wanted to avoid litigation by resolving issues consensually and agreeably.

On February 13, 2015, Annen asked to meet with Sparber to discuss issues relating to the winding up and dissolution of SAMG. Among the issues Annen wanted to discuss was obtaining the type of professional malpractice insurance coverage referred to as "tail coverage."2 Sparber told Annen to communicate with Butz instead.

On February 19, 2015, Annen sent Butz a lengthy e-mail outlining the various issues that existed between him and Sparber. The first issue within the category "firm dissolution issues" concerned the firm's malpractice insurance. Annen stated, "The malpractice insurance expires on 3/3/15. [Sparber] has not discussed the issues with me and thus I have undertaken to obtain my own policy. We need to discuss obtaining tail coverage."3

On February 23, 2015, Butz sent a letter to Annen that was labeled "CONFIDENTIAL SETTLEMENT COMMUNICATION." Butz stated that Sparber believed a formal dissolution of SAMG was the only feasible option, and he attached a "list of issues that need to be addressed so that SAMG can be dissolved and wound down in an orderly manner." Among other things, the list of issues stated that "Annen and Sparber will need to determine what tail coverage is necessary upon dissolution of SAMG," and that "Liability and E&O insurances, including tail coverage for liability insurance," would need to be addressed. Butz stated that if Annen refused to engage in a mutually negotiated dissolution, "[Sparber] will proceed with a voluntary dissolution of SAMG under Corporations Code Section 1900[, subdivision](a), as is his right as a fifty-percent shareholder. Further, [Sparber] will petition the Court to take jurisdiction over the voluntary dissolution and windup pursuant to Corporations Code Section 1904."

On March 5, 2015, Annen obtained an insurance policy from Lloyd's of London which covered him for any claims for services performed after March 8, 2015, and thus did not provide the type of insurance that would be provided through tail coverage.

On March 6, 2015, Butz informed Annen that because the matter had "dragged on too long," Sparber would be moving forward with a formal dissolution proceeding. Annen responded to Butz on March 9, 2015, stating that it was "[m]ost regrettable" that Sparber was proceeding with a formal dissolution and requesting that Sparber place a litigation hold on all documents. Annen also pointed out that the firm's malpractice insurance had expired the prior day and asked for confirmation that Sparber was immediately shutting down practice under the firm's name.

On March 16, 2015, Annen informed Brad Lebow (another attorney at Butz Dunn & DeSantis) that he had retained attorney L. Scott Keehn to represent him in the dissolution litigation. The next day, Lebow e-mailed Keehn to introduce himself and to request that the litigation hold be mutual. Keehn confirmed to Lebow by e-mail that he had been "retained to represent Mr. Annen in connection with all issues arising out of or related to the [SAMG] law firm."

On March 17, 2015, Sparber took the first necessary step to formally initiating dissolution proceedings pursuant to Corporations Code section 1901, subdivision (b) by serving Annen with a "Written Consent of Shareholder to Voluntarily Wind Up and Dissolve."

On March 18, 2015, Keehn wrote to Lebow to discuss several issues related to the dissolution. Among other things, Keehn stated, "At this point in time, as far as our client is aware, the firm is not covered by any current policy of `Errors and Omissions' insurance. Our client has independently obtained coverage for himself with regard to claims made after the termination of the firm's policy. We request that you let us know whether or not Mr. Sparber has done likewise. In any event, it appears that neither your client or ours should be purporting to engage in the practice of law on behalf of the now uninsured Corporation. Please confirm or correct my assumption that your client is not engaged in any such practice."

Meanwhile, Sparber was communicating with the insurance broker to obtain a renewal of SAMG's current professional malpractice insurance policy. On March 19, 2015, the insurance broker wrote to Sparber, informing him that the insurance carrier had "declined to offer renewal terms that includes . . . Annen's past work." Further, the broker informed Sparber that if he renewed the current policy with an exclusion for Annen's past work, the tail coverage offered by that carrier also would not provide coverage for Annen.

On March 19, 2015, Lebow e-mailed Keehn about insurance coverage issues in response to Keehn's e-mail the prior day. Confirming the content of a telephone conversation on the issue, Lebow stated, "Mr. Sparber was able to obtain coverage from the firm's carrier retroactive to the cancellation date so that there was no gap in coverage. Moreover, he is following up with the carrier regarding what needs to occur with coverage now that the firm has elected to dissolve, including any issues regarding tail coverage. Also, I confirmed that Mr. Sparber has obtained insurance for himself and is in the process of taking the necessary steps to set up [h]is own practice."

Annen alleges that he contacted the insurance broker on March 19, 2015, to confirm the information in Lebow's e-mail. According to Annen, the insurance broker said that "there was `no need for tail coverage because [Sparber] has a new separate policy . . . which covers claims against SAMG.'"

On approximately March 24, 2015, Sparber signed documents to obtain a renewal of the firm's insurance policy. Annen was excluded from coverage under the renewed policy.

On March 30, 2015, after waiting the required 10 days set forth in the firm's by-laws, Sparber took the next step in the formal dissolution process by filing a Certificate of Election to Wind Up and Dissolve with the Secretary of State. Sparber then filed a petition for dissolution of SAMG with the superior court on April 6, 2015, pursuant to Corporations Code section 1904.4 Among other things, the petition alleged that court supervision was necessary regarding "[c]ontrol of the books and records and financial affairs of the Corporation" and requested that the court "decree a winding up and dissolution of the Corporation and make any orders as to any and all matters concerning the winding up of the affairs of the Corporation."

Annen alleges that after he and SAMG were named as defendants in a lawsuit by a former client in April 2015, he found out on May 26, 2015, that he had been excluded from the renewed policy obtained by Sparber. Annen also alleges that he was told by the insurance brokerage on June 1, 2015, that "they had `dropped the ball' with regard to the tail coverage issue."

B. Annen's Lawsuit

On January 27, 2016, Annen filed the instant action against Butz Dunn & DeSantis, and attorneys Butz and Lebow (collectively, "the BDD Defendants"). Annen also named the insurance brokerage and Sparber as defendants.

Against the BDD Defendants, Annen alleged three causes of action: (1) negligence; (2) concealment; and (3) negligent infliction of emotional distress. The claims against BDD were necessarily based on the content of Lebow's March 19, 2015 e-mail. Specifically, Annen contends that in communicating to Butz about the current status of SAMG's insurance coverage, Lebow failed to make a full disclosure about Sparber's renewal of SAMG's insurance policy, including that Annen was excluded from coverage and that Annen and SAMG would need to obtain tail coverage for future claims arising from Annen's past services.5

C. The BDD Defendants' Special Motion to Strike

On March 28, 2016, the BDD Defendants filed a special motion to strike under the anti-SLAPP statute (§ 425.16) directed at all three causes of action alleged against them. Specifically, the BDD Defendants argued that Annen's claims against them were protected by the anti-SLAPP statute because they involved actions taken in connection with a judicial proceeding, namely the proceeding to dissolve SAMG, and Annen could not establish a probability of prevailing on the merits to meet his burden to allow the protected claims to go forward.

The trial court granted the special motion strike. The trial court found that the anti-SLAPP statute applied because the conduct giving rise to the claims against the BDD Defendants was taken in furtherance of their rights to petitioning activity while they were "act[ing] as counsel on behalf of . . . Sparber regarding the subject dissolution action between [Annen] and . . . Sparber." The trial court also concluded that Annen had not established a probability of prevailing on the merits because his claims were barred by the litigation privilege (Civ. Code, § 47, subd. (b)) and because the BDD Defendants owed no duty to Annen.

Annen appeals from the order granting the special motion to strike.

II.

DISCUSSION

A. Overview of the Anti-SLAPP Statute

The anti-SLAPP statute provides: "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 the 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." (§ 425.16, subd. (b)(1).)

"Resolution of an anti-SLAPP motion involves two steps. First, the defendant must establish that the challenged claim arises from activity protected by section 425.16. [Citation.] If the defendant makes the required showing, the burden shifts to the plaintiff to demonstrate the merit of the claim by establishing a probability of success." (Baral v. Schnitt (2016) 1 Cal.5th 376, 384 (Baral).) "In deciding whether the `arising from' requirement is met, a court considers `the pleadings, and supporting and opposing affidavits stating the facts upon which the liability or defense is based.'" (City of Cotati v. Cashman (2002) 29 Cal.4th 69, 79 (Cotati) [citing § 425.16, subd. (b)].)If the defendant does not demonstrate [the] initial prong, the court should deny the anti-SLAPP motion and need not address the second step.'" (Zucchet v. Galardi (2014) 229 Cal.App.4th 1466, 1476.)

"Review of an order granting or denying a motion to strike under section 425.16 is de novo. [Citation.] We consider `the pleadings, and supporting and opposing affidavits . . . upon which the liability or defense is based.' (§ 425.16, subd. (b)(2).) However, we neither `weigh credibility [nor] compare the weight of the evidence. Rather, [we] accept as true the evidence favorable to the plaintiff [citation] and evaluate the defendant's evidence only to determine if it has defeated that submitted by the plaintiff as a matter of law.'" (Soukup v. Law Offices of Herbert Hafif (2006) 39 Cal.4th 260, 269, fn. 3.)

B. The BDD Defendants Met Their Burden on the First Prong

Our focus in the first prong of the anti-SLAPP analysis is to determine whether the challenged claim arises from protected activity. (Baral, supra, 1 Cal.5th at p. 384.)

1. Applicable Law

Section 425.16, subdivision (e) specifies the type of activity protected by the anti-SLAPP statute: Anact in furtherance of a person's right of petition or free speech . . . in connection with a public issue' 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." (§ 425.16, subd. (e).)6

"[T]he statutory phrase `cause of action . . . arising from' means . . . that the defendant's act underlying the plaintiff's cause of action must itself have been an act in furtherance of the right of petition or free speech.'" (Cotati, supra, 29 Cal.4th at p. 78.)[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. . . . 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.' . . . The additional fact that protected activity may lurk in the background — and may explain why the rift between the parties arose in the first place — does not transform a . . . dispute into a SLAPP suit." (Episcopal Church Cases (2009) 45 Cal.4th 467, 477-478, citations omitted.)

As we will explain, we agree that the statements in the March 19, 2015 e-mail constitute statements made in connection with issues under consideration in an official proceeding and thus constitute protected activity under the anti-SLAPP statute.

2. The Claims Against the BDD Defendants Arise from the March 19, 2015 E-mail

The BDD Defendants argue that Annen's claims against them arise from protected activity, as defined in section 425.16, subdivision (e), because the claims are based on Lebow's March 19, 2015 e-mail, which constitutes a "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." (§ 425.16, subd. (e)(2).)

The first issue we consider is whether, as Annen contends, the initial premise of the BDD Defendants' argument fails because his claims against the BDD Defendants do not arise from the statements in Lebow's March 19, 2015 e-mail. Specifically, Annen argues, "The activity that gives rise to Annen's claims is that Sparber . . . renewed SAMG's malpractice insurance policy, but signed a `Specific Attorney Exclusion Endorsement' to the policy which excluded Annen from coverage, including for past acts and precluded Annen from purchasing tail insurance coverage. That is the act from which Annen's claims arise, not the Lebow e[-]mail of March 19, 2015." (Fn. omitted.)

We reject Annen's argument because it is not supported by the allegations of the complaint as to the BDD Defendants. As pled in the complaint, the claims against the BDD Defendants are necessarily based on statements made by Lebow in the March 19, 2015 e-mail, as those are the only representations by the BDD Defendants in the complaint that are pertinent to Annen's claims that he was misled about the status of insurance coverage that applied to him and the firm. (See Contreras v. Dowling (2016) 4 Cal.App.5th 774, 790 [in applying the anti-SLAPP statute, the court rejected plaintiff's argument that the claims against an attorney were based on aiding and abetting his clients' wrongful acts rather than communicative acts taken in connection with litigation, as "the only acts [the attorney] has been shown to have committed were giving advice to a client and writing a letter to opposing counsel. These are unquestionably protected activities."].)

Further, in a different section of his appellate brief Annen acknowledges that his claims against the BDD Defendants are based on the March 19, 2015 e-mail. Specifically, in introducing his argument, Annen states that "BDD's participation was in the form of a single [e]-mail written by Lebow on March 19, 2015, which contained misrepresentations and material omissions as to Sparber's acts. . . ."

We accordingly conclude that the claims against the BDD Defendants arise from the March 19, 2015 e-mail written by Lebow, and we proceed on that basis in analyzing the special motion to strike.

3. The Anticipated Dissolution Action Was an Official Proceeding for Purposes of the Anti-SLAPP Statute

In arguing that his claims do not arise from protected activity, Annen points out that "there was no litigation pending at the time of Lebow's [March 19, 2015] e[-]mail . . .," and thus statements made at that time could not have been made "in connection with an issue under consideration or review by a . . . judicial body, or any other official proceeding authorized by law." (§ 425.16, subd. (e)(2).) Therefore, we consider whether, as of March 19, 2015, the anticipated dissolution proceeding — although not yet filed in court — was far enough advanced so that statements made in connection with it are protected by the anti-SLAPP statute.

"`[C]ourts have adopted "a fairly expansive view of what constitutes litigation-related activities within the scope of section 425.16." [Citation.]' [Citation.] Accordingly, although litigation may not have commenced, if a statement `concern[s] the subject of the dispute' and is made `in anticipation of litigation "contemplated in good faith and under serious consideration"' [citation] then the statement may be petitioning activity protected by section 425.16." (Neville v. Chudacoff (2008) 160 Cal.App.4th 1255, 1268 (Neville).) Thus, "[s]tatements made before an `official proceeding' or in connection with an issue under consideration or review by a legislative, executive, or judicial body, or in any other `official proceeding,' . . . are not limited to statements made after the commencement of such a proceeding. Instead, statements made in anticipation of a court action or other official proceeding may be entitled to protection under the anti-SLAPP statute." (Digerati Holdings, LLC v. Young Money Entertainment, LLC (2011) 194 Cal.App.4th 873, 886-887, italics added.)

Here, by the date of the March 19, 2015 e-mail the parties had already acknowledged that Sparber would commence dissolution proceedings in court and they had both taken steps in accordance. As we have explained, on March 6, 2015, Butz informed Annen that Sparber would be moving forward with a formal dissolution proceeding. Thereafter, Annen hired Keehn as counsel to represent him in that proceeding, and the parties agreed to put a litigation hold on all relevant documents. Then, on March 17, 2015, Sparber took the first necessary step to formally initiating dissolution proceedings when he served Annen with a "Written Consent of Shareholder to Voluntarily Wind Up and Dissolve." Accordingly, we conclude that the dissolution proceedings, although not yet filed in court, were well enough advanced that they were "contemplated in good faith and under serious consideration"'" (Neville, supra, 160 Cal.App.4th at p. 1268), so that statements made in connection with that anticipated litigation fell within the protection of the anti-SLAPP statute.

4. The March 19, 2015 E-mail Was a Statement Made in Connection with the Anticipated Dissolution Proceeding

Finally, in arguing that no protected activity is at issue here, Annen also contends that "the e[-]mail had nothing to do with a matter to be litigated." Therefore, we must also consider whether we can identify a sufficiently close connection between the subject of the March 19, 2015 e-mail and the anticipated dissolution proceeding to conclude that the March 19, 2015 e-mail was in connection with the anticipated dissolution proceedings.

When the protected activity at issue is making a statement "in connection with an issue under consideration or review by a legislative, executive, or judicial body, or any other official proceeding" (§ 425.16, subd. (e)(2)), the anti-SLAPP statute "does not accord anti-SLAPP protection to suits arising from any act having any connection, however remote, with an official proceeding. The statements or writings in question must occur in connection with `an issue under consideration or review' in the proceeding." (Paul v. Friedman (2002) 95 Cal.App.4th 853, 866, italics added.) "[A] statement is `in connection with' litigation under section 425.16, subdivision (e)(2) if it relates to the substantive issues in the litigation and is directed to persons having some interest in the litigation." (Neville, supra, 160 Cal.App.4th at p. 1266, italics added & fn. omitted.)

Annen contends that the statements in the March 19, 2015 e-mail did not relate to the substantive issues in the anticipated dissolution litigation, but instead "Lebow was communicating regarding business/management action taken by Sparber as to which Annen had a right to be informed, irrespective of any threats of litigation from Sparber." The argument lacks merit.

As an initial matter, we note that the communication at issue occurred between counsel retained by Sparber to represent him in the dissolution proceedings and counsel retained by Annen to represent him in those same proceedings. In itself, that fact gives rise to a strong presumption that the subject matter discussed between the two litigation attorneys had a relation to the anticipated litigation. Case law establishes that "[a]n attorney's communication with opposing counsel on behalf of a client regarding pending litigation directly implicates the right to petition and thus is subject to a special motion to strike." (GeneThera, Inc. v. Troy & Gould Professional Corp. (2009) 171 Cal.App.4th 901, 908.) Indeed, "all communicative acts performed by attorneys as part of their representation of a client in a judicial proceeding or other petitioning context are per se protected as petitioning activity by the anti-SLAPP statute." (Cabral v. Martins (2009) 177 Cal.App.4th 471, 480.)

More importantly, the documents in the record amply support a finding that the statements in March 19, 2015 e-mail "relate[d] to the substantive issues in the litigation." (Neville, supra, 160 Cal.App.4th at p. 1266.) In understanding the issues in dispute between Annen and Sparber during their firm's dissolution, we have the benefit of the parties' communications as they tried to resolve the disputed issues to foreclose the need to file a formal dissolution proceeding. Most relevant is the February 23, 2015 letter from Butz to Annen labeled "CONFIDENTIAL SETTLEMENT COMMUNICATION." Among the issues Butz listed as needing to be addressed in connection with the dissolution were "what tail coverage is necessary upon dissolution of SAMG" and "Liability and E&O insurances, including tail coverage for liability insurance." Similarly, on March 18, 2015, Keehn wrote to Lebow to raise concerns about the status of the firm's insurance coverage, emphasizing that "neither your client or ours should be purporting to engage in the practice of law on behalf of the now uninsured Corporation. Please confirm or correct my assumption that your client is not engaged in any such practice." In this context, Lebow's statements to Keehn in the March 19, 2015 e-mail about the status of the firm's insurance coverage and Sparber's efforts in that regard, are clearly related to the substantive issues identified by the parties as being at issue in the dissolution proceedings.

Further, although Annen contends that the e-mail merely related to "business/management action," and not issues presented in the dissolution litigation, this argument ignores the fact that dissolution litigation necessarily focuses on business and management issues. Indeed, in a dissolution action the court is brought in precisely because the parties require assistance to resolve the disputed business and management issues that the shareholders cannot agree upon themselves. Consistent with this focus, the petition for dissolution identifies issues concerning the "[c]ontrol of the books and records and financial affairs of the Corporation" as being in dispute and requests that the court "decree a winding up and dissolution of the Corporation and make any orders as to any and all matters concerning the winding up of the affairs of the Corporation." In our view, the resolution of any outstanding disputes between the parties concerning actions to be taken regarding the firm's insurance policies would fall squarely within the scope of the relief sought in the dissolution petition.

Based on the foregoing, we accordingly conclude that the BDD Defendants met their burden to establish that Annen's claims against them arose from protected activity under the anti-SLAPP statute, as those claims arose from Lebow's purported misleading statements in the March 19, 2015 e-mail, which were 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." (§ 425.16, subd. (e)(2).)

C. Annen Did Not Meet His Burden on the Second Prong

Having determined that the BDD Defendants satisfied their burden under the first prong of the anti-SLAPP analysis, we next consider whether Annen has met his burden under the second prong.

1. Applicable Law

In the second prong analysis, "the burden shifts to the plaintiff to demonstrate that each challenged claim based on protected activity is legally sufficient and factually substantiated." (Baral, supra, 1 Cal.5th at p. 396.) "The court does not weigh evidence or resolve conflicting factual claims. Its inquiry is limited to whether the plaintiff has stated a legally sufficient claim and made a prima facie factual showing sufficient to sustain a favorable judgment. It accepts the plaintiff's evidence as true, and evaluates the defendant's showing only to determine if it defeats the plaintiff's claim as a matter of law." (Id. at pp. 384-385.) If a plaintiff meets this burden to showthe requisite minimal merit,'" the action is allowed to go forward despite the fact that it arises from protected activity. (Id. at p. 385.)

2. The Litigation Privilege Bars All of the Causes of Action Against the BDD Defendants

The BDD Defendants contend that Annen cannot demonstrate a probability of prevailing because all of the causes of action against them are barred by the litigation privilege set forth in Civil Code section 47, subdivision (b).7

The litigation privilege "is relevant to the second step in the anti-SLAPP analysis in that it may present a substantive defense plaintiff must overcome to demonstrate a probability of prevailing."'" (Kenne v. Stennis (2014) 230 Cal.App.4th 953, 963-964, fn. omitted.) As our Supreme Court has explained, "The litigation privilege . . . provides that a `publication or broadcast' made as part of a `judicial proceeding' is privileged. This privilege is absolute in nature, applying `to all publications, irrespective of their maliciousness.' . . . `The usual formulation is that the privilege 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 [has] some connection or logical relation to the action.'" (Action Apartment Assn., Inc. v. City of Santa Monica (2007) 41 Cal.4th 1232, 1241, citations omitted (Action Apartment).)

"To be protected by the litigation privilege, a communication must be `in furtherance of the objects of the litigation.' [Citation.] This is `part of the requirement that the communication be connected with, or have some logical relation to, the action, i.e., that it not be extraneous to the action.' [Citation.] A prelitigation communication is privileged only when it relates to litigation that is contemplated in good faith and under serious consideration." (Action Apartment, supra, 41 Cal.4th at p. 1251.) "Many cases have explained that [Civil Code ]section 47[, subdivision ](b) encompasses not only testimony in court and statements made in pleadings, but also statements made prior to the filing of a lawsuit, whether in preparation for anticipated litigation or to investigate the feasibility of filing a lawsuit." (Hagberg v. California Federal Bank (2004) 32 Cal.4th 350, 361.)

Annen contends that the litigation privilege does not apply to his claims against the BDD Defendants because "Lebow's e[-]mail was the communication of SAMG management action being currently taken by Sparber . . .," and thus did not relate to the dissolution litigation. Annen made the same argument as to the first prong of the anti-SLAPP analysis. As we explained above in rejecting Annen's argument, each of Annen's causes of action against the BDD Defendants is based on the allegation that the BDD Defendants made misleading statements in the March 19, 2015 e-mail, and the record establishes that statements in the March 19, 2015 e-mail arose in connection with the anticipated dissolution action.

Further, contrary to Annen's contention, there is also no triable issue of fact as to whether the dissolution litigation was "contemplated in good faith and under serious consideration" for the purpose of invoking the litigation privilege. (Action Apartment, supra, 41 Cal.4th at p. 1251.) As we have discussed, by the time of the March 19, 2015 e-mail, the parties had both acknowledged that Sparber would go forward with a formal dissolution action, the parties had both hired litigation counsel and agreed on a litigation hold for the firm's documents, and Sparber had taken the first step toward formal dissolution. These undisputed facts establish the parties anticipated litigation at the time of the March 19, 2015 e-mail.

In sum, the claims against the BDD Defendants are based on communication by counsel that was made in anticipation of a seriously considered judicial proceedingto achieve the objects of the litigation,'" and hadsome connection or logical relation to the action.'" (Action Apartment, supra, 41 Cal.4th at p. 1241.) Accordingly, we conclude that the litigation privilege applies to bar Annen's claims against the BDD Defendants.

Because the litigation privilege bars Annen's claims against the BDD Defendants, Annen does not meet his burden to demonstrate a probability of prevailing on those claims under the second prong of the anti-SLAPP analysis.8 Therefore, the trial court properly granted the BDD Defendants' special motion to strike, and we affirm the order granting that motion.

DISPOSITION

The order granting the BDD Defendants' special motion to strike is affirmed.

McCONNELL, P. J. and IRION, J., concurs.

FootNotes


1. Unless otherwise indicated, all further statutory references are to the Code of Civil Procedure. SLAPP is an acronym for strategic lawsuit against public participation. (Briggs v. Eden Council for Hope & Opportunity (1999) 19 Cal.4th 1106, 1109 & fn. 1 (Briggs).)
2. A document in the record also refers to "tail coverage" as an "Extended Reporting Period" option. One secondary source describes the concept of tail coverage as follows: "Professional liability insurance in the form of a claims-made policy does not cover liability for wrongful acts occurring during the policy period if the claim is not made until after the policy period expires. Such policies may thus result in coverage gaps when an insured changes to an occurrence policy after the claims-made policy lapses, when a new claims-made policy is purchased without retroactive coverage, or when the insured retires. Such gaps can be avoided through the purchase of `tail coverage' which insures the policy holder for claims that are asserted during the life of the tail policy for acts or omissions that took place during the life of the original claims-made policy." (Annot., Construction and Application of "Tail" Insurance Policies (2007) 21 A.L.R. 6th 515.)
3. Apparently the date of "3/3/15" is a typographical error. Other allegations in the complaint and references in the record reflect that the insurance policy expired on March 8, 2015.
4. In relevant part, Corporations Code section 1904 states that "[i]f a corporation is in the process of voluntary winding up, the superior court . . . upon the petition of . . . a shareholder or shareholders who hold shares representing 5 percent or more of the total number of any class of outstanding shares . . ., and upon such notice to the corporation and to other persons interested in the corporation as shareholders and creditors as the court may order, may take jurisdiction over such voluntary winding up proceeding if that appears necessary for the protection of any parties in interest. The court, if it assumes jurisdiction, may make such orders as to any and all matters concerning the winding up of the affairs of the corporation and for the protection of its shareholders and creditors as justice and equity may require."
5. Against Sparber, the complaint alleged (1) breach of contract; (2) breach of the covenant of good faith and fair dealing; (3) breach of fiduciary duty; (4) negligence; (5) concealment; (6) constructive fraud; and (7) negligent infliction of emotional distress. Against the insurance brokerage, the complaint alleged (1) breach of fiduciary duty; (2) negligence; (3) concealment; (4) constructive fraud; and (5) negligent infliction of emotional distress.
6. When the first two subparts of section 425.16, subdivision (e) are at issue (i.e., speech or petitioning before a legislative, executive, judicial or other official proceeding; or statements made in connection with an issue under review or consideration by an official body), the moving party is not required to independently demonstrate that the matter is apublic' issue" within the statute's meaning. (Briggs, supra, 19 Cal.4th at p. 1113.)
7. Civil Code section 47 states in relevant part: "A privileged publication or broadcast is one made: [¶] . . . [¶] (b) In any (1) legislative proceeding, (2) judicial proceeding, (3) in any other official proceeding authorized by law, or (4) in the initiation or course of any other proceeding authorized by law and reviewable pursuant to Chapter 2 (commencing with Section 1084) of Title 1 of Part 3 of the Code of Civil Procedure. . . ."
8. Because we conclude that the litigation privilege applies, we need not and do not consider the BDD Defendants' argument that Annen's claims against them fail for the additional reason that Annen cannot establish the presence of a duty toward him.
Source:  Leagle

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