Plaintiff sued attorneys who handled a class action in Los Angeles, based on the attorneys' handling of the settlement proceeds in that action — an action in which plaintiff was not a party. Defendants filed an anti-SLAPP motion to strike the complaint, asserting that plaintiff's lawsuit dealt with protected activity and that she could not demonstrate a likelihood of prevailing on the merits. The trial court denied the motion under the first step of the anti-SLAPP analysis, and did not reach step two.
Defendants appeal, and we review the matter de novo, concluding first that plaintiff's lawsuit arose out of protected activity. And we go on to decide step two, and hold that plaintiff has failed to demonstrate a likelihood of prevailing on the merits. We thus reverse, with instructions to enter an order
According to the allegations of her verified complaint, plaintiff-respondent Anne W. Thayer (Thayer) and "her spouse" were "co-owners of a resort membership." Thayer's spouse, the alleged "co-owner," is Ernest M. Thayer (Mr. Thayer). Mr. Thayer is a very experienced attorney, who was admitted to the California State Bar in 1961. And, his declaration would support, Mr. Thayer is apparently quite successful, as "in [his] last year of working as an attorney full-time, [he] earned approximately $3 million." Mr. Thayer represented his wife below, and represents her on appeal.
Defendants-appellants are Kabateck Brown Kellner LLP, a Los Angeles law firm, and Richard Kellner, a member of the firm (for convenience, usually referred to collectively as Kabateck). Kabateck (along with another firm whose identity is not pertinent here) filed a class action litigation in Los Angeles involving "resort memberships," litigation referred to below as the "Abercrombie & Kent litigation."
In 2007, Kabateck entered into letter agreements with "members" of luxury destination clubs to provide legal services. The letter agreement provided that it was "between attorneys and client," and was for this purpose: "2.
On August 14, 2007, Mr. Thayer signed such a letter agreement, and that same day he signed a "Joint Prosecution Agreement." No such agreements were ever signed by Thayer.
In January 2008, the class action lawsuit was filed in Los Angeles Superior Court. It named as defendants Abercrombie & Kent and related entities and individuals, and alleged fraud in connection with the sale of memberships in luxury destination clubs.
In October 2010, the steering committee agreed to settle the litigation for some $53,170,000. The settlement was approved by the Honorable Peter Lichtman, who ordered that he would retain jurisdiction over the matter to enforce the terms and conditions of the settlement agreement if necessary.
Kabateck prepared and delivered to all plaintiffs a memorandum explaining the basis for the settlement and the distribution method of the settlement proceeds. Shortly thereafter, Kabateck sent an "FAQ" to all plaintiffs, including Mr. Thayer, explaining the distribution and allocation of the settlement proceeds as established by the special master appointed by the steering committee. The "FAQ" also explained how a plaintiff could appeal an allocation determined by the special master.
On January 14, 2011, Mr. Thayer signed a general release in consideration of the settlement of the Abercrombie & Kent litigation. The release provides that it is signed "on my own behalf and on behalf of my spouse, agents, representatives, heirs, assigns and any entity ...." Mr. Thayer also signed a "Disbursement Authorization" of the settlement proceeds for his portion.
While Mr. Thayer was signing those documents in January 2011, he did so having already filed the lawsuit involved here.
On December 21, 2010, Mr. Thayer filed a complaint naming as plaintiff "Thayer, on behalf of herself and all others similarly situated." The complaint
The complaint then goes on to allege that "Thayer's spouse" asked for a breakdown of the disbursements, and then alleges this:
Thayer's complaint, therefore, is essentially premised on the following theory: Kabateck settled the Abercrombie & Kent litigation for just over $53 million and held the settlement funds in trust; pursuant to a decision of the steering committee, Kabateck notified its clients that, unless they affirmatively opted out of a "Fraud Fund" to be used in a related criminal prosecution, Kabateck would deduct 2.5 percent from the clients' net recoveries; and Kabateck told Mr. Thayer that his notification was late and therefore deducted 2.5 percent of his settlement proceeds, or $1,216.21. And, of course, all claimed interactions with Kabateck were with "Thayer's spouse" — not Thayer.
On February 23, 2011, Kabateck filed a special motion to strike the complaint under Code of Civil Procedure section 425.16
The request for judicial notice attached what were referred to as "true and correct" copies of the documents.
On March 11, 2011, Thayer filed her "Opposition to [Kabateck's] Three Motions, One Request for Judicial Notice, and Two Requests for Attorneys Fees & Costs." That opposition was a total of nine pages in length, and included opposition to two other motions in addition to the anti-SLAPP, those (1) to change venue and (2) to strike punitive damages from the complaint.
Thayer's brief opposition to the anti-SLAPP motion argued essentially three things: (1) that Kabateck has not proven that they ever sought to exercise their political or legal rights; (2) that Thayer's suit is a class action and therefore exempt from the anti-SLAPP statute; and (3) that a breach of the settlement agreement is not "an exercise of right of petition or free speech." Thayer's opposition went on to argue that there is a "probability of [Thayer's] success in this action," an argument that was all of 13 lines.
On March 17, Kabateck filed a reply memorandum, accompanied by another declaration from Kellner.
The SLAPP motion was originally set to be heard on March 24, 2011. It apparently did not come on that day and, as there is no register of actions or transcript of any hearing, we do not know precisely what did occur. What we glean from the record is that a "Notice of Taking Matters Under Submission and Schedule to File Supplemental Briefs" was filed on May 2 (signed Apr. 29), which provided in pertinent part as follows: "After reading the tentative rulings into the record concerning defendants Kabateck Brown Kellner et al.'s special motion to strike under Code of Civil Procedure section 425.16, motion to strike punitive damages allegations, and motion for change of venue, the court ordered as follows": Kabateck may have until May 2 to file their supplemental brief, Thayer until May 6.
The tentative ruling is likewise not in the record, so we do not know what it ruled. What we do have is Kabateck's supplemental brief which begins as follows:
"The tentative states: `[I]t is clear that the timing of this motion deprives plaintiff of an opportunity to amend her complaint per the Court's previous rulings on the defendant's demurrer.'" Kabateck's supplemental brief goes on to argue why a "potential amended complaint is irrelevant to a pending anti-SLAPP motion."
Thayer submitted her supplemental brief on May 6.
Two months later, on July 5, the trial court entered what it called "Orders on the Motions of Defendants to Strike and to Change Venue." It was seven lines long and provided in its entirety as follows: "Defendants' special motion to strike is denied. The activity that constitutes plaintiff's claim in the complaint does not constitute protected litigation related speech and petitioning activity. Jespersen v. Zubiate-Beauchamp (2003) 114 Cal.App.4th 624, 630-632 [7 Cal.Rptr.3d 715]. [¶] Because the issue regarding the disbursement of settlement funds was mooted by plaintiff's husband's signing of the release after the complaint was filed, there is no longer a basis for a change of venue to Los Angeles. Accordingly, the change of venue motion is denied."
Kabateck filed a timely notice of appeal.
Subdivision (b)(1) of section 425.16 provides that "[a] cause of action against a person arising from any act of that person in furtherance of the
"The Legislature enacted section 425.16 to prevent and deter `lawsuits [referred to as SLAPP's] brought primarily to chill the valid exercise of the constitutional rights of freedom of speech and petition for the redress of grievances.' (§ 425.16, subd. (a).) Because these meritless lawsuits seek to deplete `the defendant's energy' and drain `his or her resources' [citation], the Legislature sought "to prevent SLAPPs by ending them early and without great cost to the SLAPP target"' [citation]. Section 425.16 therefore establishes a procedure where the trial court evaluates the merits of the lawsuit using a summary-judgment-like procedure at an early stage of the litigation." (Varian Medical Systems Inc. v. Delfino (2005) 35 Cal.4th 180, 192 [25 Cal.Rptr.3d 298, 106 P.3d 958].)
Finally, and as subdivision (a) of section 425.16 expressly mandates, the section "shall be construed broadly."
With these principles in mind, we turn to a review of the issues before us, a review that is de novo. (Grewal v. Jammu (2011) 191 Cal.App.4th 977, 988 [119 Cal.Rptr.3d 835] (Grewal).)
The Court of Appeal gave examples of all this in Kashian v. Harriman, supra, 98 Cal.App.4th at page 908: "Several other decisions likewise have adopted a fairly expansive view of what constitutes litigation-related activities within the scope of section 425.16. The defendant in Dove Audio, Inc. v. Rosenfeld, Meyer & Susman (1996) 47 Cal.App.4th 777 [54 Cal.Rptr.2d 830], an action for defamation, was a law firm conducting an investigation in anticipation of filing a complaint with the Attorney General. Church of Scientology v. Wollersheim [(1996)] 42 Cal.App.4th 628 [49 Cal.Rptr.2d 620] involved an action to set aside a court judgment the defendant had received in a prior lawsuit. And Wilcox v. Superior Court [(1994)] 27 Cal.App.4th 809 [33 Cal.Rptr.2d 446], a suit for defamation and restraint of trade, concerned statements made by the defendant in exhorting others to contribute to the cost of proposed litigation. In each case, the court held the statute applied."
The Supreme Court also confirmed much of this, in Rusheen v. Cohen, supra, 37 Cal.4th at page 1056: "`A cause of action "arising from" defendant's litigation activity may appropriately be the subject of a section 425.16 [special] motion to strike.' [Citation.] `Any act' includes communicative conduct such as the filing, funding, and prosecution of a civil action. (Ludwig v. Superior Court (1995) 37 Cal.App.4th 8, 17-19 [43 Cal.Rptr.2d 350].) This includes qualifying acts committed by attorneys in representing clients in litigation. (See, e.g., Chavez v. Mendoza (2001) 94 Cal.App.4th 1083, 1086 [114 Cal.Rptr.2d 825]; Dowling v. Zimmerman (2001) 85 Cal.App.4th 1400, 1418-1420 [103 Cal.Rptr.2d 174].)"
Arguing to the contrary, Thayer makes four arguments, the first consisting of several pages, with the other three being particularly brief, consisting of no more than two paragraphs. The first argument asserts that Kabateck "did not prove" that the complaint could be read to come within section 425.16 based on the Abercrombie & Kent litigation because Kabateck "never proved" that litigation. In Thayer's words, Kabateck "adduced no admissible evidence that `the Abercrombie & Kent litigation' ever had existed. [¶] [Kabateck] allegedly described that litigation and its supposed settlement in great detail in their memorandum. [Citation.] But not once in either of their `supporting' declarations did they authenticate any document therefrom. And although they requested the trial court to take judicial notice of four documents which they claimed to have been from `the Abercrombie & Kent litigation' [citation], none was either sworn to or certified. United States v. Dibble (9th Cir. 1970) 429 F.2d 598, 602. And although [Thayer] relied upon Dibble, both in the trial court [citation] and in this court in her successful opposition to defendants' writ petition (No. A132739), [Kabateck] makes no mention thereof in their opening brief." We are nonplussed.
As quoted above, Thayer's verified complaint discussed the Abercrombie & Kent litigation at great length. Indeed, the exhibits attached to the complaint included two exhibits — the engagement letter and joint protection agreement — signed by Mr. Thayer. The exhibits had this reference: "re: Abercrombie & Kent et al. Litigation."
The statute provides that in ruling on a SLAPP motion, "the court shall consider the pleadings, and [the] supporting and opposing affidavits stating the facts upon which the liability ... is based." (§ 425.16, subd. (b)(2).) As the leading practical treatise puts it, this portion of the anti-SLAPP "should be interpreted to allow the court to consider the `pleadings' in determining the nature of the `cause of action.'" (Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial (The Rutter Group 2011) ¶ 7:1021.1, p. 7(11)-48 (rev. # 1, 2011).)
Thayer's reference to Dibble is equally misplaced. Relying on it, Thayer argues that the documents attached to Kabateck's request for judicial notice were not "sworn or certified" and, so the argument runs, there is no evidence that the Abercrombie & Kent litigation ever existed.
In sum and in short, Thayer's complaint clearly involves things that happened in the Abercrombie & Kent litigation — a litigation, not incidentally, to which she was not even a party.
Thayer's next argument is that her "Suit Is a Putative Class Action, and Therefore Exempt From The Special Motion To Strike Of CCP Section 425.16." Thayer is wrong, as shown, for example, by a recent case from our colleagues in Division One: Stewart v. Rolling Stone LLC (2010) 181 Cal.App.4th 664 [105 Cal.Rptr.3d 98]. There, the Court of Appeal reversed a trial court's denial of an anti-SLAPP motion brought by the publishers of Rolling Stone magazine, ordering stricken the complaint in a "class action" brought on behalf of a putative "class" of independent music performers. (Id. at pp. 670-671; see Maughan v. Google Technology, Inc. (2006) 143 Cal.App.4th 1242, 1246 [49 Cal.Rptr.3d 861].)
Thayer's next argument is that a breach of a settlement agreement reached in an underlying action is not within the SLAPP statute, an argument that consists of all of 11 lines, as follows: "In Applied Business Software, Inc. v. Pacific Mortgage Exchange, Inc. (2008) 164 Cal.App.4th 1108 [79 Cal.Rptr.3d 849], Applied Business Software, Inc. (ABS) sued Pacific Mortgage Exchange, Inc. (PME) in the underlying action, which the parties settled. Thereafter, ABS sued PME again, this time for an alleged breach of the parties' settlement agreement in the first action. In the second action, PME filed a special motion to strike the complaint pursuant to CCP section 425.16, asserting that it was retaliatory. The trial court denied PME's motion, and the appellate court affirmed. That court held that a breach by PME of a settlement agreement cannot `reasonably be said to have been taken by defendant [PME] in furtherance of its right of petition or free speech in connection with a public issue. Page 1117." Applied is unavailing.
The setting there was that the two parties reached a settlement; later, one of the parties brought suit against the other for breach of the settlement agreement. (Applied Business Software, Inc. v. Pacific Mortgage Exchange, Inc., supra, 164 Cal.App.4th at pp. 1111-1114.) The court found that a claim for a simple breach of the settlement agreement after the underlying action had been concluded did not arise from constitutionally protected activity. (Id. at p. 1118.) This is not the case here, where Thayer's lawsuit claims a breach of an entirely different agreement — Mr. Thayer's agreement with Kabateck in connection with its handling of the Abercrombie & Kent litigation.
Thayer's final argument is that actions for breaches of fiduciary duty and fraud are not proper subjects of an anti-SLAPP motion, in claimed support of which Thayer cites the same two cases she cited below: Hylton v. Frank E. Rogozienski, Inc. (2009) 177 Cal.App.4th 1264, 1271-1272 [99 Cal.Rptr.3d 805] (Hylton); PrediWave Corp. v. Simpson Thacher & Bartlett LLP (2009) 179 Cal.App.4th 1204, 1227-1228 [102 Cal.Rptr.3d 245] (PrediWave).)
Neither applies here, as any candid reading of the cases makes clear. Hylton sued his former attorney, defendant Frank E. Rogozienski (Hylton, supra, 177 Cal.App.4th at p. 1267), and PrediWave Corporation sued a law firm and a lawyer who had previously represented both PrediWave and its former president and CEO. (PrediWave, supra, 179 Cal.App.4th at p. 1209.) Both cases involved lawsuits by former clients against their former attorneys. Neither case stands for the proposition that the anti-SLAPP statute should not govern claims by a nonclient such as Thayer.
In other words, only the "first class" of claims — those brought by former clients against their former attorneys based on the attorneys' acts on behalf of those clients — may not be within the ambit of SLAPP. The other kinds of actions — "(2) clients' causes of action against attorneys based upon statements or conduct solely on behalf of different clients, and (3) nonclients' causes of action against attorneys" — are. (PrediWave, supra, 179 Cal.App.4th at p. 1227.) That, of course, is the situation here.
Finally, we note that Jespersen v. Zubiate-Beauchamp, supra, 114 Cal.App.4th 624, the lone case cited by the trial court, does not support Thayer. There, several plaintiffs sued their attorneys for their claimed mishandling of a civil litigation, resulting in a court order requiring the plaintiffs to provide verified responses to discovery requests, and ultimately causing them to be sanctioned. (Jespersen v. Zubiate-Beauchamp, supra, 114 Cal.App.4th at pp. 627-628.) The defendants filed a SLAPP motion, which the trial court denied. The Court of Appeal affirmed, concluding that defendants were sued "for their failure to comply with a discovery statute and two court orders to do so," conduct which did not amount to "constitutionally protected speech or petition." (Id. at p. 632.)
Jespersen was a garden-variety legal malpractice claim by clients against lawyers, clearly not within the SLAPP statute. (See PrediWave, supra, 179 Cal.App.4th at p. 1222.) Here, of course, Thayer was not a client. And no malpractice claim was alleged.
The second step in the SLAPP analysis is to determine whether a plaintiff has shown a probability of prevailing on the claim. Here, because the trial court found, however erroneously, that plaintiff's lawsuit was not within the SLAPP statute, it did not reach prong two. Nevertheless, we can decide it. (See Roberts v. Los Angeles County Bar Assn. (2003) 105 Cal.App.4th 604, 615-616 [129 Cal.Rptr.2d 546].) And we now turn to that decision.
While Thayer's burden may not be "high," she must demonstrate that her claim is legally sufficient. (Navellier v. Sletten, supra, 29 Cal.4th at p. 93.) And she must show that it is supported by a sufficient prima facie showing, one made with "competent and admissible evidence." (Tuchscher Development Enterprises, Inc. v. San Diego Unified Port Dist. (2003) 106 Cal.App.4th 1219, 1236 [132 Cal.Rptr.2d 57]; see Evans v. Unkow (1995) 38 Cal.App.4th 1490, 1497 [45 Cal.Rptr.2d 624].) Thayer's demonstration does not measure up.
Thayer's response to this is relegated to a footnote, where she observes: "Defendants contend that plaintiff has no ownership in the trust, and no standing to assert any of the claims which she makes in this action. [Citation.] That contention is simply fanciful. Plaintiff has alleged in her verified complaint that her spouse and defendants intended their contracts to affect her [citation], and defendants have adduced no evidence to the contrary. Hence, plaintiff is undeniably a third-party beneficiary of those contracts. [¶] Plaintiff was not a signatory of the contracts which are Exhibits A and B of her complaint. [Citation.] Nevertheless, she is an owner, along with her husband (who was a signatory), of the settlement funds of which the defendants were ... trustees. Hence, her simultaneous status as a third-party beneficiary of those contracts is not a necessary qualification for her status as plaintiff therein."
Applying these and similar principles, courts have observed that "We are wary about extending an attorney's duty to persons who have not come to the attorney seeking legal advice and whom the attorney has never met." (Hall v. Superior Court (2003) 108 Cal.App.4th 706, 714 [133 Cal.Rptr.2d 806] [rejecting spouse's claim of privity with his wife's attorney]; see Chang v. Lederman, supra, 72 Cal.App.4th at pp. 82-83 [dismissing action against
In fact, Thayer makes no effort to support any particular theory, contenting herself with the argument that "not only is there a probability of success on the merits, in fact, plaintiff has already achieved success on the merits vis-a-vis herself." In claimed support of this argument, Thayer goes on to briefly assert as follows: that Kabateck held the settlement proceeds in trust for their clients; that they "notified their clients that unless they affirmatively `opted-out of the Fraud Fund' by registered mail, postmarked no later than November 26, 2010, defendants would deduct 2.5 percent from their clients' net recoveries (the `Fraud Fund') for use in a criminal prosecution of a specified person whom defendants had failed to sue in the underlying action.... In a later notice dated November 19, 2010, defendants asserted that if a beneficiary had not already opted out, it was then too late to do so.... November 19 was a full week before the deadline originally set by defendants for opting out. [¶] [Thayer], acting through her spouse, notified [Kabateck] by telephone that she did not want to contribute to the `Fraud Fund.' [Citation.] [Kabateck] replied that [Thayer's] notification was too late, whereupon [Thayer] filed this action. [Citation.] Following that filing, [Kabateck] remitted to [Thayer's] spouse the net recovery without a deduction for the `Fraud Fund.' [Citation.] But for the filing of this action, [Kabateck] would have donated $1,216.21 (2.5%) of [Thayer's] share of the trust fund to the `Fraud Fund.'"
We do not understand the argument, other than to assert that somehow or another Mr. Thayer might have had some claim. He, of course, is not the plaintiff here — not to mention that he signed a release in the Abercrombie & Kent litigation.
The order denying the SLAPP motion is reversed, and the matter remanded with instructions to (1) enter an order granting the motion, and (2) hold a
Haerle, Acting P. J., and Lambden, J., concurred.
"On April 29, defendants gave notice that on April 28 `[t]he matter was taken under submission.' [Citation.] Curiously, defendants, in that same notice, stated that the court had ordered post-submission briefs. Defendants have not explained who, if anyone, appeared on April 28, or how this order was transmitted to them without plaintiff's having been afford[ed] the opportunity to oppose it, both procedurally and calendar-wise. Rule 3.1308(a)(1) requires the court to confirm its tentative ruling, and this is particularly so in view of plaintiff's having relied upon that rule in foregoing her right to oral argument. Despite the above, plaintiff submits the following ...."
