Aboui v. Watson

Filed 10/17/07 Aboui v. Watson CA3

NOT TO BE PUBLISHED

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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

THIRD APPELLATE DISTRICT

(Placer)

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A defendant filed a cross-complaint against the opposing attorney. In response, the attorney filed an anti-SLAPP (Strategic Lawsuit Against Public Participation) motion. (See Code Civ. Proc.,  425.16.)^[1] The trial court denied the motion, ruling that the attorney failed to demonstrate that the attorneys actions were protected by the anti-SLAPP statute. We conclude that the trial court erred because (1) the anti-SLAPP statute protects an attorneys right to petition and (2) all other arguments against granting the anti-SLAPP motion are without merit. We therefore reverse.

THE PARTIES

The plaintiffs on the original complaint were Bahram Abdolhamidi, also known as Bob Hamidi, and his wife Mitra Mostoufi. They are not involved in this appeal.

The defendants on the original complaint were M. Nasser Aboui and Houssein Mostoufi, also known as Henry Mostoufi. Houssein Mostoufi is not involved in this appeal.

Defendant M. Nasser Aboui, and his corporation, M&NA Enterprises, Inc., filed a cross-complaint. They are the respondents in this appeal, having prevailed on the anti-SLAPP motion in the trial court. In this opinion, we refer to defendant and cross-complainant Aboui and his corporation, collectively, as Aboui.

The cross-defendants were the plaintiffs, several automobile dealerships, attorney Tariq A. Kanwar, his law clerk Adrian Watson, and Kanwars corporation, ILS Law Corporation. Of those cross-defendants, only Kanwar, Watson, and the corporation are involved in this appeal, having lost on their anti-SLAPP motion against Aboui. In this opinion, we refer to cross-defendants Watson, Kanwar, and ILS Law Corporation, collectively, as ILS, except when it is necessary to refer to them individually.

PROCEDURAL BACKGROUND

In December 2004 the plaintiffs, represented by ILS, sued Aboui over dealings having to do with real property and automobile dealerships. Aboui responded with a cross-complaint. In the cross-complaint, Aboui alleged two causes of action against ILS, both for violation of the unfair competition law. (Bus. & Prof. Code,  17200 et seq.) One cause of action alleged that ILS engaged in the unauthorized practice of law because Watson held himself out to be an attorney. The other cause of action alleged that ILS communicated directly with Aboui, even though he was represented by counsel. As relief based on these two unfair competition causes of action, Aboui sought (1) an order prohibiting Watson from the unlawful practice of law; (2) an order prohibiting Kanwar from (a) aiding and abetting the unlawful practice of law, (b) communicating with represented parties, and (c) claiming the right to compensation from his clients; and (3) an order requiring ILS to return all fees earned from their clients in this litigation. Aboui did not claim injury to himself based on ILSs action. The cross-complaint also sought special, general, and punitive damages against all cross-defendants.

Attorney James E. Houpt, counsel for ILS, called attorney James S. Richards, counsel for Aboui, on Friday, February 4, 2005, seeking to discuss ILSs intention to file an anti-SLAPP motion. Houpt asked Richards to dismiss the cross-claims against ILS. Richards declined. On Saturday, February 5, Houpt e-mailed Richards, again offering to forego the anti-SLAPP motion if the cross-claims were dismissed. Richards responded that he was in favor of amending [the] cross[-]complaint, [b]ut for different purposes.

On Monday, February 7, 2005, Houpt filed a demurrer and an anti-SLAPP motion on behalf of ILS. Later that day, Richards sent a fax to Houpt purporting to accept Houpts proposal that the cross-claims be dismissed without prejudice. Before the hearing on the demurrer and anti-SLAPP motion, scheduled for March 8, 2005, Richards, on behalf of Aboui, dismissed the unfair competition causes of action against ILS and filed an opposition to the anti-SLAPP motion.

After a hearing, the court commissioner denied ILSs anti-SLAPP motion. The commissioner stated that ILS failed to demonstrate that the allegations arise from acts in furtherance of the right of petition or free speech.

ILS appeals.

FAILURE TO FILE RESPONDENTS BRIEF

The appeal was stayed, before briefing, during the pendency of the plaintiffs bankruptcy proceedings. After the bankruptcy proceedings were terminated, ILS filed its opening brief. Aboui made and received several requests for extension of time; however, he failed to file a respondents brief, despite notices from this court of the need to do so. Because Aboui failed to file a brief, the court will decide the appeal on the record, the opening brief, and any oral argument by the appellant. (See Cal. Rules of Court, rule 8.220(a)(2).)^[2]

ANTI-SLAPP MOTIONS

Section 425.16 applies to any cause of action arising from an act in furtherance of a persons right of petition or free speech under the United States or California Constitution in connection with a public issue. ( 425.16, subds. (b)(1), (e).) Such a claim 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. (Id., subd. (b)(1).) In order to encourage participation in matters of public significance, section 425.16 shall be construed broadly. (Id., subd. (a).)

The defendant has the initial burden of making a prima facie showing that the plaintiffs claims are subject to section 425.16. [Citations.] If the defendant makes that showing, the burden shifts to the plaintiff to establish a probability of prevailing, by making a prima facie showing of facts which would, if proved, support a judgment in the plaintiffs favor. [Citation.] Whether section 425.16 applies and whether the plaintiff has shown a probability of prevailing are both reviewed independently on appeal. [Citations.] (ComputerXpress, Inc. v. Jackson (2001) 93 Cal.App.4th 993, 998-999.)

An attorney sued for filing an action on behalf of a client has standing to file an anti-SLAPP motion. (Jespersen v. Zubiate-Beauchamp (2003) 114 Cal.App.4th 624, 629.)

DISCUSSION

I

Right to Petition

The trial court erred by finding that ILS failed to demonstrate that the allegations arise from acts in furtherance of the right to petition or free speech. Aboui cross-complained against ILS asserting causes of action based on the manner in which ILS was representing the plaintiffs. Since the right to petition includes the right to litigate claims and prelitigation activities related to those claims, Abouis cross-claims against ILS are the type of activity protected by the anti-SLAPP statute.

The initiation of litigation is an act in furtherance of the right to petition. (Mattel, Inc. v. Luce, Forward, Hamilton & Scripps (2002) 99 Cal.App.4th 1179, 1188 (Mattel).) The language of the anti-SLAPP statute contemplates the filing and prosecution of a lawsuit. It is well established that filing a lawsuit is an exercise of a party's constitutional right of petition. [Citations.] [T]he constitutional right to petition . . . includes the basic act of filing litigation or otherwise seeking administrative action. [Citations.] Further, the filing of a judicial complaint satisfies the in connection with a public issue component of section 425.16, subdivision (b)(1) because it pertains to an official proceeding. [Citations.] [Citation.] It follows that a cause of action arising from a defendants alleged improper filing of a lawsuit may appropriately be the subject of a section 425.16 motion to strike. [Citation.] [Citation.] (Mattel, supra, 99 Cal.App.4th at p. 1188.)

Despite Abouis argument in the trial court to the contrary, ILSs actions were in furtherance of the right to petition. Activities relating to litigation are protected by the anti-SLAPP statute. This protection extends to prelitigation activities relating to the subject matter of the ultimate litigation. (Sylmar Air Conditioning v. Pueblo Contracting Services, Inc. (2004) 122 Cal.App.4th 1049, 1058.)

In the trial court, Aboui argued that his cross-complaint was not based on actions that ILS took in furtherance of the right to petition because the complaint was for ILSs representation on a transactional matter, not in litigation. (See Moore v. Shaw (2004) 116 Cal.App.4th 182, 197 [drafting of termination agreement well before litigation began did not implicate right to petition].) In his memorandum of points and authorities, Aboui claimed: The Cross-complaint was not based on conduct in a judicial proceeding, but rather for transaction representation of Plaintiff Abdolhamidi in a real estate matter. This factual assertion is not supported by a reference to evidence, such as a declaration. Our examination of the record reveals that the second cause of action in the cross-complaint contained a cryptic comment about a real estate matter. It states: Cross-Complaints [sic] allege on or about November 3, 2004, Cross-defendant Watson informed Cross-complainant ABOUI that when this transaction (the sale of the real and personal property) [sic] that he, Cross-defendant Watson, would be sending Cross-complainants ABOUI and M&NA a bill in the amount of $5,000 for legal services rendered on Cross-complainant^[]s ABOUIs behalf. The dates that ILS is alleged to have committed the unfair competition are between August 1, 2004, and December 9, 2004. ILS filed the complaint on behalf of the plaintiffs on December 9, 2004. Accordingly, Aboui complained about activities leading up to the filing of the complaint, which activities were in furtherance of the right to petition. The trial court erred in finding otherwise.

II

Abouis Probability of Prevailing

Because ILSs actions were in furtherance of the right to petition, the burden shifted to Aboui to establish a probability of prevailing on the cross-complaint, by making a prima facie showing of facts that would, if proved, support a judgment in Abouis favor. Aboui failed to make such a showing because his unfair competition causes of action against ILS did not allege that Aboui suffered injury and lost money or property, which are necessary elements. (Californians for Disability Rights v. Mervyns, LLC (2006) 39 Cal.4th 223, 228.) In fact, Aboui conceded that he could not prevail on the original cross-complaint.

In the trial court, Aboui asserted that his First Amended Cross-complaint make[s] matters perfectly clear concerning whether he had a probability of prevailing. The anti-SLAPP motion, however, was filed in response to the original cross-complaint. There is no first amended cross-complaint in the record on appeal. The contention that he had a probability of prevailing is therefore without merit.

III

Other Arguments Made in the Trial Court

Because we are constitutionally bound not to reverse unless there was a miscarriage of justice (Cal. Const. art. VI, 13), we also consider Abouis other arguments proffered in the trial court in opposition to the anti-SLAPP motion, even though Aboui has not filed a brief on appeal. We conclude they are all without merit.

A. Unclean Hands

Aboui argued that, because ILS failed to pay certain fees in the trial court and was not properly registered as a legal corporation, ILS had unclean hands and should have been denied any relief. Aboui cited no authority for the proposition that an anti-SLAPP motion can be denied because the movant had unclean hands, and we are aware of none.

B. Failure to Meet and Confer in Good Faith

Aboui contended that ILS failed to meet and confer as required by rule 20.3.1 of the Superior Court of Placer County, Local Rules. As noted above, however, counsel for ILS contacted counsel for Aboui and asked that the cross-complaint be dismissed as to ILS. Counsel for Aboui would not commit to that. The trial court did not rely on the failure to meet and confer in denying the motion. In any event, the local meet-and-confer rule was preempted by the Judicial Council. (Cal. Rules of Court, rule 3.20(a).) Accordingly, the contention was and is without merit.

C. Application of Section 425.17

Section 425.17 makes the anti-SLAPP procedure inapplicable to (1) any action brought solely in the public interest or on behalf of the general public (subd. (b)) or (2) any cause of action brought against a person primarily engaged in the business of selling or leasing goods or services for representations of fact about that persons . . . services (subd. (c)).^[3] Aboui asserted that his cross-complaint fell within the exceptions to the anti-SLAPP stated in section 425.17. The assertion is without merit.

Aboui is ineligible for the exception pursuant to subdivision (b) of section 425.17 (the public interest exception) because, even though he specified no injury personal to himself, he sought general, special, and punitive damages against ILS, along with all other cross-defendants. The public interest exception is inapplicable if the plaintiff or cross-complainant seeks relief greater than or different from the relief sought for the general public . . . . ( 425.17, subd. (b)(1).)

Aboui is ineligible for the exception pursuant to subdivision (c) of section 425.17 (the commercial speech exception) because Aboui, to whom the alleged representations were made, was not a customer or potential customer. The commercial speech exception applies only if the defendant or cross-defendant made a statement to an actual or potential buyer or customer . . . . ( 425.17, subd. (c)(2).) Aboui was the opposing party, represented by counsel.

Therefore, Aboui is not entitled to the protection provided by section 425.17.

IV

Attorneys Fees

The anti-SLAPP statute provides for an award of attorneys fees and costs to a prevailing defendant (or, as here, cross-defendant). ( 425.16, subd. (c); Pfeiffer Venice Properties v. Bernard (2002) 101 Cal.App.4th 211, 218 [successful anti-SLAPP movant entitled to costs and attorneys fees even if matter dismissed before hearing].) Accordingly, because we reverse the order denying the anti-SLAPP motion and direct the trial court to enter a new order granting the anti-SLAPP motion, we will also direct the trial court to determine the amount of attorneys fees and costs to be awarded to ILS.

DISPOSITION

The order denying the anti-SLAPP motion is reversed and remanded with directions to enter a new order granting the anti-SLAPP motion and determining the amount of costs and attorneys fees, including costs and attorneys fees for the anti-SLAPP motion in the trial court and for this appeal. (Cal. Rules of Court, rule 8.276.)

NICHOLSON , J.

We concur:

DAVIS, Acting P.J.

BUTZ , J.

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^[1] Further code citations, though unspecified, are to the Code of Civil Procedure.

^[2] By failing to file a respondents brief, Aboui forfeited the right to oral argument. (Cal. Rules of Court, rule 8.220(a)(2).)

^[3] Section 425.17 provides, in pertinent part:

(a) The Legislature finds and declares that there has been a disturbing abuse of Section 425.16, the California Anti-SLAPP Law, which has undermined the exercise of the constitutional rights of freedom of speech and petition for the redress of grievances, contrary to the purpose and intent of Section 425.16. The Legislature finds and declares that it is in the public interest to encourage continued participation in matters of public significance, and that this participation should not be chilled through abuse of the judicial process or Section 425.16.

(b) Section 425.16 does not apply to any action brought solely in the public interest or on behalf of the general public if all of the following conditions exist:

(1) The plaintiff does not seek any relief greater than or different from the relief sought for the general public or a class of which the plaintiff is a member. A claim for attorney's fees, costs, or penalties does not constitute greater or different relief for purposes of this subdivision.

(2) The action, if successful, would enforce an important right affecting the public interest, and would confer a significant benefit, whether pecuniary or nonpecuniary, on the general public or a large class of persons.

(3) Private enforcement is necessary and places a disproportionate financial burden on the plaintiff in relation to the plaintiff's stake in the matter.

(c) Section 425.16 does not apply to any cause of action brought against a person primarily engaged in the business of selling or leasing goods or services, including, but not limited to, insurance, securities, or financial instruments, arising from any statement or conduct by that person if both of the following conditions exist:

(1) The statement or conduct consists of representations of fact about that person's or a business competitor's business operations, goods, or services, that is made for the purpose of obtaining approval for, promoting, or securing sales or leases of, or commercial transactions in, the person's goods or services, or the statement or conduct was made in the course of delivering the person's goods or services.

(2) The intended audience is an actual or potential buyer or customer, or a person likely to repeat the statement to, or otherwise influence, an actual or potential buyer or customer, or the statement or conduct arose out of or within the context of a regulatory approval process, proceeding, or investigation, except where the statement or conduct was made by a telephone corporation in the course of a proceeding before the California Public Utilities Commission and is the subject of a lawsuit brought by a competitor, notwithstanding that the conduct or statement concerns an important public issue.