This appeal arises from two of many lawsuits seeking damages allegedly caused by the activities of private investigator Anthony Pellicano and others. Michael Gerbosi has filed a complaint against Pellicano and Gaims, Weil, West & Epstein, LLP (Gaims),
Gaims appealed and we affirm the trial court's rulings on Gaims's anti-SLAPP motion to strike Gerbosi's complaint. All of Gerbosi's causes of action against the law firm may proceed, and Gerbosi may recover attorneys' fees incurred in opposing the anti-SLAPP motion. We affirm in part the trial court's rulings on Gaims's anti-SLAPP motion to strike Finn's complaint. Her causes of action alleging unlawful-wiretapping-related claims may proceed, but her causes of action alleging that Gaims engaged in wrongful acts in the course of underlying litigation must be stricken. As a result, the attorneys' fees in favor of Finn must be denied.
A long time ago, Finn dated Robert Pfeifer, a former executive at Sony Records, Hollywood Records, and Z-Axis, Ltd., a video game developer. According to Pfeifer, he ended their relationship in 2000 upon learning that Finn operated an Internet prostitution service. About the same time that Pfeifer and Finn were parting, Z-Axis fired Pfeifer for the stated reason that he was using illegal drugs. Pfeifer then sued Z-Axis for wrongful termination. During the summer of 2000, Finn testified at a deposition in Pfeifer's wrongful termination case, stating that she had seen him using illegal drugs. Pfeifer and his lawyers then hired Pellicano to "investigate" Finn, ostensibly in her role as a witness in Pfeifer's civil action against Z-Axis. By the end of 2000, Pfeifer had retained Gaims. During the course of representing Pfeifer, Gaims had communications with Pellicano.
In addition to representing Pfeifer in his wrongful termination case against Z-Axis, Gaims acted as Pfeifer's counsel in a number of other matters. In October 2000, Gaims successfully represented Pfeifer in a domestic harassment injunction matter filed by Finn. Gaims also represented Pfeifer in a collection case filed against Finn. The case involved a claim that Finn had not repaid a $10,000 loan from Pfeifer. Finn filed a cross-complaint in the collection case, alleging Pfeifer had stalked and harassed her, and Gaims defended Pfeifer against Finn's claims. Gaims also represented Pfeifer in another action he filed against Finn in which he alleged invasion of privacy, fraud and intentional infliction of emotional distress (IIED).
In early 2006, a federal grand jury returned an indictment against Pellicano and Pfeifer and others on conspiracy and wiretapping charges. Eventually, Pfeifer agreed to plead guilty and to testify against Pellicano. In March 2008, Pfeifer testified against Pellicano at his criminal trial.
Michael Gerbosi lived next door to Finn when the events summarized above transpired. On April 7, 2008, Gerbosi (represented by the Johnson & Johnson law firm) filed a civil complaint for damages against Pacific Bell Telephone Company, Pellicano, Pfeifer, and Gaims. (Super. Ct. L.A. County, No. BC388664.) Gerbosi's complaint alleges the following causes of action as to all defendants: unlawful wiretapping (Pen. Code, § 631); unlawful eavesdropping (Pen. Code, § 632); common law intrusion; invasion of privacy (Cal. Const., art. I, § 1); IIED; negligence; and, as to Pacific Bell and Gaims only, negligent supervision. The gist of Gerbosi's action is found in his allegations that he engaged in confidential communications with Finn in 2000 and 2001, and that Pfeifer, Pellicano, Pacific Bell, and Gaims, acting in furtherance of a common scheme, intercepted his confidential communications by unlawful wiretaps and unlawful eavesdropping. Gerbosi alleges he became aware of the wrongful interception of his confidential communications in the year prior to filing his complaint, the apparent implication being that he learned of the unlawful activity as a result of the criminal proceedings against Pellicano.
On April 9, 2008, Finn (represented by The Ball Law Firm LLP) filed a complaint against Pfeifer and Gaims. (Super. Ct. L.A. County, No. BC388812.) Finn's complaint alleges seven causes of action: invasion of privacy (Cal. Const., art. I, § 1); IIED; unlawful eavesdropping (Pen. Code, §§ 632, 637.2); unfair competition (UCL; Bus. & Prof. Code, § 17200); negligence; malicious prosecution; and abuse of process. The substance of Finn's action is embodied in her allegations that Pfeifer, Pellicano, and Gaims had "set out to destroy" Finn after she and Pfeifer separated, and that they conspired to use, and did use, illegal wiretaps and harassing lawsuits to accomplish their goal.
In May 2008, the trial court found Gerbosi's case and Finn's case to be related, and issued an order assigning the cases to a common trial judge for all purposes.
On September 11, 2008, Gaims filed a special motion to strike Finn's complaint under the anti-SLAPP statute. The motion, with its supporting declarations and exhibits occupies nearly 800 pages of Gaims's appendix on appeal. Gaims's motion argued that all of Finn's causes of action "arose from" the firm's acts in furtherance of its petitioning rights vis-à-vis representing Pfeifer during the course of the litigation that had transpired between Pfeifer and Finn in 2000 and 2001. Gaims argued that its petitioning activities in representing Pfeifer constituted "protected activities" within the meaning of the anti-SLAPP statute, and that Finn could not show a probability of prevailing on her claims for several reasons, including, among others, that Finn's causes of action were barred by the applicable statutes of limitations.
On September 22, 2008, Gaims filed an anti-SLAPP motion to strike Gerbosi's complaint. The motion, with its supporting declarations and exhibits occupies more than 300 pages of Gaims's appendix on appeal. The basic thrust of Gaims's anti-SLAPP motion to strike Gerbosi's complaint was that all of his causes of action, as did Finn's, arose from Gaims's activities as Pfeifer's lawyers in the course of the litigation between Pfeifer and Finn in 2000 and 2001.
In September 2008, the Johnson & Johnson law firm substituted in as counsel of record for Finn. A month later, Finn and Gerbosi (represented by the Johnson & Johnson firm) filed a joint motion to conduct discovery. In November 2008, the trial court granted the discovery motion.
In August 2009, almost one year after Gaims filed its anti-SLAPP motions, Finn and Gerbosi filed separate oppositions to the firm's motions. The opposition papers, including supporting declarations and exhibits, cover more than 1,400 pages of the appendix on appeal. Gaims's reply papers, including additional declarations and evidentiary objections cover another 400 or so pages of the appendix on appeal.
On September 8, 2009, the parties argued both of Gaims's anti-SLAPP motions to the trial court, and the court took the motions under submission. On September 22, 2009, the court issued an extensive written order denying both anti-SLAPP motions. At the same time, the court's order indicated that it intended to award attorneys' fees to Gerbosi and Finn pursuant to section 128.5, as incorporated within section 425.16, subdivision (c).
In November 2009, Finn and Gerbosi submitted papers in which they requested more than $220,000 in attorneys' fees and costs. Filings in opposition and reply followed. The papers addressing the issue of attorneys'
Gaims filed a timely notice of appeal.
An appellate court reviews an order denying an anti-SLAPP motion under the de novo standard of review. (PrediWave, supra, 179 Cal.App.4th at p. 1220.) As a result, we will employ the same two-step procedure as did the trial court in determining if Gaims's anti-SLAPP motions were properly denied.
To defeat this conclusion Gaims relies on Flatley v. Mauro (2006) 39 Cal.4th 299 [46 Cal.Rptr.3d 606, 139 P.3d 2] (Flatley) in support of its argument that it could invoke the anti-SLAPP statute. More specifically, Gaims argues that it satisfied the first step of the anti-SLAPP procedure because Finn's opposition papers did not establish either (1) that Gaims has conceded its conduct was illegal, or (2) that the evidence "conclusively" proves that Gaims engaged in illegal conduct. We read Flatley differently than does Gaims. This is the predominant rule to be taken away from Flatley: "[S]ection 425.16 cannot be invoked by a defendant whose assertedly protected activity is illegal as a matter of law and, for that reason, not protected by constitutional guarantees of free speech and petition." (Flatley,
We understand Flatley to stand for this proposition: when a defendant's assertedly protected activity may or may not be criminal activity, the defendant may invoke the anti-SLAPP statute unless the activity is criminal as a matter of law. In coming to this result, the Supreme Court observed that an activity could be deemed criminal as a matter of law when a defendant concedes criminality, or the evidence conclusively shows criminality. At the same time, the Supreme Court cautioned that a defendant's "mere assertion that his [or her] underlying activity was constitutionally protected" will not suffice to shift to the plaintiff the burden of showing that the defendant's underlying activity was criminal, and not constitutionally protected. (Flatley, supra, 39 Cal.4th at p. 317, italics added.) As the Supreme Court aptly concluded, such a rule would "eviscerate the first step of the two-step inquiry set forth in the [anti-SLAPP] statute." (Ibid.) "While a defendant need only make a prima facie showing that the underlying activity falls within the ambit of the statute, ... the statute envisions that the courts do more than simply rubberstamp such assertions before moving on to the second step." (Ibid.)
The insurmountable obstacle for Finn is the statute of limitations. Her litigation-related causes of action for IIED, negligence, malicious prosecution, and abuse of process allege that she suffered harm, mainly emotional distress, during 2000 and 2001. This harm was caused by the litigation tactics employed by Gaims during 2000 and 2001, to "destroy" Finn, in the course of representing Pfeifer in the underlying litigation. It is undisputed that the litigation ended in November 2001, when Pfeifer and Finn executed the settlement agreement and joint release of claims. It is undisputed that Finn filed her litigation-related causes of action in April 2008, more than six years after the litigation ended. We agree with Gaims that these undisputed facts establish that Finn's litigation-related causes of action are time-barred, meaning she cannot prevail on those causes of action.
Finn alternatively argues that the trial court correctly found that Gaims is equitably estopped from asserting the statute of limitations as a defense. The problem with Finn's alternative argument is that she does not point to any evidence showing any act by Gaims after November 2001 that deterred Finn from filing her litigation-related causes of action until 2008. Finn's argument is that she did not file her litigation-related causes of action until 2008 because Gaims's intimidation during the litigation in 2000 and 2001 caused her to live in "perpetual fear" that Gaims would "sue her again" someday. We reject Finn's argument because it essentially posits the proposition that a statute of limitations on a litigation-related cause of action never begins to run where the allegedly wrongful litigation dissuades the filing of a lawsuit based on the litigation. In other words, Finn basically argues that a tort itself excuses the filing of a cause of action based on the tort when the tort is so bad that it frightens a person into sitting on his or her rights. We disagree.
The primary case upon which Finn relies, Ortega v. Pajaro Valley Unified School Dist. (1998) 64 Cal.App.4th 1023 [75 Cal.Rptr.2d 777] (Ortega), is distinguishable. In Ortega, a public school teacher, Ancira, molested Mona Lisa, a 12-year-old student, in late 1986. In early 1987, Mona Lisa confided to friends that Ancira had molested her, and, at that time, the police and the school investigated the matter. During the investigations, school officials stated their distrust of Mona Lisa's accusation, mistreated her and her parents, expressly lied to Mona Lisa's parents that Ancira had no history of similar accusations (in fact, Ancira had been prosecuted and acquitted on molestation charges). Further, they asked teachers at the school to contact the police and vouch for Ancira's good character and impugn Mona Lisa's character. (Id. at p. 1034.) When Ancira filed a complaint against Mona Lisa and her parents for defamation, the school district supported his lawsuit. In 1988, Ancira molested Victoria, another 12-year-old student, but the incident remained
At the trial of Mona Lisa's civil action, the court submitted the issue of equitable estoppel to assert the statute of limitations to a jury. Based on evidence establishing the facts summarized above, a jury found that the school district was equitably estopped from asserting that statute of limitations because (1) its activities had deterred Mona Lisa from initiating her lawsuit, and (2) Mona Lisa had commenced her action within a reasonable time after the deterring effects of the district's activities had ended. (Ortega, supra, 64 Cal.App.4th at p. 1030.) The Sixth District Court of Appeal found the jury's findings were supported by substantial evidence.
Ortega is not applicable to Finn's litigation-related causes of action in her current action because the facts are different. In Ortega, the evidence showed that the defendant school district had engaged in acts after the tort of molestation occurred, and that it was those after-the-wrong actions which deterred the plaintiff from filing her lawsuit. In Finn's current case, there is not even an allegation that Gaims engaged in any act after the tort, to wit, the prosecution of wrongful litigation, which deterred her from filing her lawsuit. Ortega does not support Finn's argument that severe tortious behavior in and of itself may estop an adult defendant from asserting the statute of limitations.
Finn next argues that the one-year statute of limitations prescribed by section 340.6 for a legal malpractice claim does not apply to her litigation-related causes of action. We do not find this issue to be dispositive in addressing the issue presented. Finn does not explain how it makes a difference whether a one-year malpractice limitations period applies, or a two-year tort limitations period applies. In other words, Finn does not explain how her claims—which were filed more than six years after the end of the underlying litigation—are timely apart from section 340.6. Finn has not cited us to a seven-year statute of limitations applicable to her claims.
We do not address Finn's argument that the November 2001 settlement agreement, which she contends was coerced, does not bar her litigation-related claims. The question of whether the settlement agreement acts as an enforceable bar to Finn's current claims is not important. Regardless of its validity, the agreement demarks the end date of the underlying litigation. As such, it provides a discernable accrual date for purposes of the statute of limitations, which we find bars Finn's litigation-related claims.
Turning to Gaims's anti-SLAPP motion attacking Gerbosi's complaint, we find the trial court was within its discretion in determining that no reasonable attorney would have believed there was merit to the attempt to strike Gerbosi's complaint, not given the nature of his claims. Whatever defenses Gaims may have, those defenses could not be established by way of an anti-SLAPP motion. Under the anti-SLAPP statute, Gaims's motion would have had merit only if predicated on a showing that Gerbosi sued Gaims for exercising its constitutional rights, which he did not.
The trial court awarded attorneys' fees upon a joint application by Gerbosi and Finn. Because we have found that Gaims's anti-SLAPP motion was not without merit as to all of Finn's causes of action, the cause must be remanded to the trial court to consider anew the attorneys' fee issues. On remand, the court must make a reasonable apportionment of fees as between Gerbosi and Finn, and enter an award of fees in favor of Gerbosi only. And, in doing so, Gerbosi may only recover attorneys' fees incurred in opposing Gaims's anti-SLAPP motion, not his attorneys' fees for the entire action to date. (Lafayette Morehouse, Inc. v. Chronicle Publishing Co. (1995) 39 Cal.App.4th 1379 [46 Cal.Rptr.2d 542].)
In the current case, the trial court indicated its intention to impose sanctions in the order issued on September 22, 2009. The court did not fix the amount of attorneys' fees until it issued its order December 15, 2009. In the intervening three-month period, the court afforded the parties an extensive opportunity to submit materials concerning the issue of attorneys' fees. We see no due process error.
Finally, we decline to address Gaims's argument that the amount of fees and costs was an abuse of discretion. Because the trial court must revisit the proper amount of fees, limited to Gerbosi, it is premature at this point to consider whether any part of the jointly awarded figure of roughly $220,000 is excessive. Once the court fixes the amount of fees recoverable by Gerbosi alone, Gaims may raise whatever challenges, if any, it considers arguable.
The trial court's order of September 22, 2009, denying in full Gaims's anti-SLAPP motion to strike Gerbosi's complaint is affirmed. The trial court's order denying Gaims's anti-SLAPP motion to strike Finn's complaint is affirmed in part and reversed in part as explained in this opinion. The court's order dated December 15, 2009, fixing attorneys' fees jointly in favor of
Flier, J., and Grimes, J., concurred.