Caskey v. Barnett
Filed 3/2/12 Caskey v. Barnett CA2/4
NOT TO BE PUBLISHED IN THE
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opinion has not been certified for publication or ordered published for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.
IN THE
COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION FOUR
MARSHALL A. CASKEY
et al.,
Plaintiffs and Respondents,
v.
JOHN BARNETT et
al.,
Defendants and Appellants.
B230085
(Los Angeles County
Super. Ct. No. BC445945)
APPEAL
from an order of the Superior Court of href="http://www.adrservices.org/neutrals/frederick-mandabach.php">Los Angeles
County, Debre Katz Weintraub, Judge. Affirmed.
Nemecek & Cole, Jonathan
B. Cole, Michael W. Feenberg, and Susan S. Baker, for Defendant and Appellant
John Barnett.
Proskauer Rose, Michael A.
Firestein, and Navid Soleymani, for Defendants and Appellants Robert
Kaufman and Stacey Nicholas.
Caskey
& Holzman, Marshall A. Caskey, Daniel M. Holzman, and
Thomas L. Dorogi, for Plaintiffs and Respondents.
_________________________________________
Robert Kaufman, Stacey Nicholas, and
John Barnett (collectively defendants) appeal from an order denying their
special motion to strike the
underlying complaint as a strategic lawsuit against public participation
(SLAPP; Code Civ. Proc., § 425.16).href="#_ftn1"
name="_ftnref1" title="">>[1]> We
conclude that defendants did not meet their burden of showing that the conduct
forming the basis of the underlying complaint involved petitioning activity
within the meaning of section 425.16, and affirm the trial court’s order.
>FACTUAL AND PROCEDURAL HISTORY
The
complaint alleges the following facts.
Tim Langan had been employed by Nicholas and one her entities, Captain
Enterprises, Ltd. Langan also had been
in a relationship with Nicholas. Nicholas
was the estranged spouse of Henry Nicholas, III, founder of a major corporate
entity. In October 2009, the Nicholases
were in the midst of divorce proceedings when Henry Nicholas subpoenaed Langan
for a deposition. Langan retained John
Barnett, a criminal law attorney, to represent him at this deposition.
In
March 2010, Langan sought representation for potential legal claims against
Nicholas arising out of Langan’s employment and their personal
relationship. He met with Thomas
Simpson, a family law attorney, and discussed these claims. Simpson recommended that Langan retain Daniel
Holzman, a partner with the law firm Caskey & Holzman, to represent him on
his claims under the Fair Employment and
Housing Act (FEHA), Government Code section 12940 et seq.
Langan
told the attorneys that he would be able to proceed with legal representation
only if they agreed to a contingency fee arrangement. Langan told them he believed it would be
unnecessary to file a lawsuit against Nicholas because she would promptly
settle the matter.
On
March 26, Holzman began to draft a legal services agreement. Langan requested that the agreement include a
provision for a lower contingency fee in the event the matter settled quickly. Holzman sent the agreement to Langan, which
contained a provision that attorney fees would constitute 25 percent of the
gross recovery if the matter settled without mediation and 33â…“ percent of
the recovery if a settlement was reached during prelitigation mediation. The agreement further provided, “Client
understands that Attorney is only being retained for purposes of a
pre-litigation
mediation . . . [¶] . . . if this
matter does not resolve in a pre-litigation mediation then a new fee agreement
will be prepared if [the attorneys] continue to represent Client.” The agreement also reflected Langan’s
instruction not to file a complaint with the Department of Fair Employment and
Housing.
Langan
indicated that he was hesitant to sign the agreement because Nicholas’s lawyers
had been in contact with Barnett about a settlement, and he was concerned that
Simpson and Holzman’s fees would be unfair if the matter settled quickly and
for a significant amount of money. He
wrote to Simpson and Holzman, “[w]ithout a way to really calculate or quantify
what the damages are, I am left guessing and thinking that I should write her
myself, or just walk away.” On April 1,
he told the two attorneys that he would not be continuing with representation
and would try to settle the matter himself.
On
April 8, Barnett negotiated a tolling agreement with Nicholas’s counsel on
behalf of Langan. The purpose of the
agreement was to “allow the Parties . . . the opportunity
to amicably resolve the potential Claims, if possible.” It provided, “Nicholas [and Captain
Enterprises] believes it has claims against Langan, and Langan believes [he]
has claims against Nicholas. . . . By
entering into this Tolling Agreement, the Parties are reserving their rights to
assert each and every such claim . . . .”
On
April 17, Langan wrote to Simpson and Holzman.
He said that he had failed to resolve the matter “quietly,” and he
believed it would not be resolved without Simpson’s and Holzman’s
services. Langan sent the signed legal
services agreement to the attorneys. Langan
also informed Barnett that he had formally retained Simpson and Holzman.
On
April 23, Nicholas’s attorney, Robert Kaufman, called Barnett and left him a
message stating that Nicholas had authorized him to convey a settlement offer
to Langan. Barnett responded and told
Kaufman that Langan had retained Simpson and Holzman and that Kaufman should
communicate with them. Kaufman stated he
was not authorized to communicate the offer to Holzman and Simpson and that Kaufman
would only present Nicholas’s “generous offer” to Barnett. Langan told Holzman and Simpson of this
condition and assured them that he would not agree to any settlement without
their advice. Barnett also told Simpson
and Holzman that no settlement would be concluded and expressed his discomfort
with the situation.
The
next day Langan and Barnett met with Nicholas and Kaufman. After the meeting, Langan e-mailed Simpson
and Holzman, informing them that he had reached a confidential agreement with
Nicholas. Holzman responded and asked Langan
to provide a copy of the agreement.
Langan replied that he was discharging the two attorneys and that no
settlement agreement had been signed. On
April 25, Simpson and Holzman sent a notice of lien to Barnett and Nicholas.
On
September 20, Holzman’s law firm, Caskey & Holzman, his partner Marshall A.
Caskey, and Simpson (collectively plaintiffs), filed the present action against
Barnett, Kaufman, and Nicholas. Langan
was not named as a defendant. Plaintiffs
alleged the condition on the settlement offer—that Caskey and Holzman not be
present at the meeting where the offer would be presented—constituted an
intentional interference with the legal services agreement and was designed to
induce Langan to breach it. Plaintiffs
brought claims for inducing a breach of contract, intentional interference with
an economic relationship, intentional interference with a prospective economic
relationship, and negligent interference with a prospective economic
relationship.
Kaufman
and Nicholas filed a special motion to
strike plaintiffs’ complaint as a SLAPP action, contending that the
settlement offer at issue arose from a protected activity and that plaintiffs
were unable to demonstrate a probability they would prevail on their
claims. (See § 425.16, subd. (b).) Barnett filed a separate motion on the same
grounds. The trial court denied both
motions, reasoning that defendants failed to show plaintiffs’ claims were based
on acts in furtherance of their right of petition or free speech. In particular, the court found there was
insufficient evidence that Langan was seriously contemplating litigation at the
time the settlement communications occurred.
This timely appeal followed.
At
the request of appellants, we have taken judicial notice of a May 2011 demand
for arbitration written by Langan claiming “he is entitled to compensation from
Nicholas and Captain arising from the facts, events, contracts, and
circumstances surrounding his employment with and separation from Captain and
his personal relationship with Nicholas.”
Attached to the demand letter is an agreement to arbitrate entered into
by Langan and Nicholas, which stated that Nicholas and Captain believed they
had potential claims against Langan. We
also have taken judicial notice of a May 2011 lawsuit filed by Langan against
plaintiffs for breach of contract and declaratory relief. The complaint alleges that there was no
settlement between Langan and Nicholas and that plaintiffs are not entitled to
any future settlement Langan obtains.
>DISCUSSION
Defendants
contend the trial court erred in denying their motion to strike the complaint
because plaintiffs’ causes of action arise from constitutionally protected
petitioning activity. (See § 425.16.) We disagree.
Defendants did not meet their burden of showing that the conduct which
forms the basis for plaintiffs’ allegations involves petitioning activity
within the meaning of section 425.16.
“A
SLAPP suit—a strategic lawsuit against public participation—seeks to chill or
punish a party’s exercise of constitutional rights
to free speech and to petition the government for redress of
grievances. [Citation.] The Legislature enacted Code of Civil
Procedure section 425.16—known as the anti-SLAPP statute—to provide a
procedural remedy to dispose of lawsuits that are brought to chill the valid
exercise of constitutional rights.
[Citation.]” (>Rusheen v. Cohen (2006) 37 Cal.4th 1048,
1055-1056.)
The
statute provides in part: “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 . . . or . . . 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 a two-step inquiry. “First, the court decides whether the
defendant has made a threshold showing that the challenged cause of action is
one arising from protected activity.” (>Equilon Enterprises v. Consumer Cause, Inc.
(2002) 29 Cal.4th 53, 67 (Equilon
Enterprises).) The statute describes
four categories of conduct that will qualify:
“(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).) If the defendant makes
this showing, then the court determines whether the plaintiff has demonstrated
a probability of prevailing on the claim.href="#_ftn2" name="_ftnref2" title="">>[2] (Equilon
Enterprises, at p. 67.)
We
review the trial court’s ruling de novo (Flatley
v. Mauro (2006) 39 Cal.4th 299, 325 (Flatley)),
and consider “the pleadings, and supporting and opposing affidavits stating the
facts 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.” [Citations.]’” (Flatley,
at p. 326.)
Plaintiffs
allege they had an attorney-client agreement with Langan, of which Kaufman and
Nicholas were aware, and that by conditioning the settlement offer on excluding
plaintiffs from the negotiations, they induced Langan to breach the agreement
and interfered with plaintiffs’ ability to collect a contingency fee. Plaintiffs allege that Barnett aided Kaufman
and Nicholas by participating in the settlement negotiations despite knowing of
the agreement between plaintiffs and Langan.
Defendants
contend they demonstrated these claims involved protected activity as defined
under section 425.16, subdivision (e)(1) as “any written or oral statement or
writing made before a legislative, executive, or judicial proceeding, or any
other official proceeding authorized by law,” and subdivision (e)(2) as “any
written or oral statement or writing made in connection with an issue under
consideration or review by a . . . judicial body, or any
other official proceeding authorized by law.”
Plaintiffs contend that defendants do not meet their burden under
section 425.16, subdivision (e)(1) since the subdivision requires that the
statement be made before an “official proceeding authorized by law,” a
criterion which is not met by acts or statements that occur outside a
legislative, executive, judicial, or other official proceeding. (Paul
v. Friedman (2002) 95 Cal.App.4th 853, 865.) Plaintiffs note that subdivision (e)(2) has
been broadly construed to encompass communications preparatory to or in
anticipation of litigation or another official proceeding. (Briggs
v. Eden Council for Hope & Opportunity (1999) 19 Cal.4th 1106,
1115 (Briggs).) We agree with plaintiffs and confine our
analysis to whether defendants have met their burden under subdivision (e)(2)
of section 425.16.
While
we adopt an expansive view of what constitutes litigation-related activities
under section 425.16 (Briggs, supra,
19 Cal.4th at p. 1106) to be protected, a prelitigation statement must “‘concern[]
the subject of the dispute’ and [be] made ‘in anticipation of litigation
“contemplated in good faith and under serious consideration” [citation].’” (Neville
v. Chudacoff (2008) 160 Cal.App.4th 1255, 1268.)href="#_ftn3" name="_ftnref3" title="">>[3]> To
make this determination, we look to case law interpreting both the anti-SLAPP
statute and the litigation privilege in Civil Code section 47, subdivision
(b). This is because “clauses (1) and
(2) of subdivision (e) of . . . section 425.6 . . . ‘are
parallel to and coextensive with the definition of privileged communication
under Civil Code section 47, subdivision (b).’
[Citation.]” (>Gallanis-Politis v. Medina (2007) 152
Cal.App.4th 600, 617, fn. omitted; accord Briggs,
supra, at p. 1115 [since
communications preparatory to or in anticipation of litigation are within the
protection of the litigation privilege, such statements are equally entitled to
benefits of anti-SLAPP statute].)
In
Edwards v. Centex Real Estate Corp.
(1997) 53 Cal.App.4th 15, the court delineated the outer bounds of the
litigation privilege. It set out four
“considerations for distinguishing the point at which the litigation privilege
may attach to statements in advance of litigation.” (Id.
at p. 34) First, “the communication must
have been made preliminary to a proposed
judicial or quasi-judicial proceeding,” which is evidenced by the party having
suggested or proposed a lawsuit orally or in writing. (Ibid.) Second, “the verbal proposal of litigation
must be made in good faith.” (>Id. at p. 35, italics omitted.) Third, “the contemplated litigation must be
imminent.” (Ibid., italics omitted.)
Fourth, “the litigation must be proposed in order to obtain access to
the courts for the purpose of resolving the dispute.” (Ibid.,
italics omitted.) The court noted that
“[t]he critical point of each of these four elements is that the mere potential
or ‘bare possibility’ that judicial proceedings ‘might be instituted’ in the
future is insufficient to invoke the litigation privilege.” (Id.
at p. 36.)
The
trial court found the gravamen of plaintiffs’ causes of action to be that
Kaufman and Nicholas convinced Langan to exclude Simpson and Holzman from the
negotiation in order to avoid paying their fees. It concluded that at the time of these
communications, Langan was not seriously considering litigation.
Accepting
as true the evidence favorable to plaintiffs (Flatley v. Mauro, supra, 39 Cal.4th at p. 326), we find
neither party was seriously considering litigation when the Nicholas offer was
communicated. The legal services
agreement signed by Langan reflects his intent to retain plaintiffs for the
limited purpose of prelitigation negotiations.
The agreement contained a clause stating as much and providing that if
Langan wanted to pursue litigation, a separate agreement would be
required. No such agreement was ever
executed. Further, Langan instructed
plaintiffs not to file a complaint with the Department of Fair Employment and
Housing, which is a statutory prerequisite to filing a lawsuit based on
Langan’s employment law claims. (Gov.
Code, § 12960; Romano v. Rockwell
Internat., Inc. (1996) 14 Cal.4th 479, 492.) It is evident that Langan’s purpose in hiring
plaintiffs was to give him leverage in negotiations with Nicholas, not to
initiate a lawsuit.href="#_ftn4" name="_ftnref4"
title="">>[4] Further, defendants produced no evidence that
either party suggested or proposed litigation orally or in writing. (See Edwards
v. Centex Real Estate Corp., supra, 53 Cal.App.4th at p. 34; cf. >Neville v. Chudacoff, supra, 160
Cal.App.4th at p. 1269 [letter sent by attorney had subject line
“‘Maxsecurity v. Mark Neville’” and stated that attorney was representing the
party in the matter and would aggressively pursue all available remedies].)
Defendants
argue that Langan’s May 2011 letter demanding arbitration compels the
conclusion that he contemplated litigation in April 2010. The subsequent filing of a lawsuit is
evidence that litigation was contemplated in good faith when the lawsuit is
filed within a reasonable time of the offending statements. (Compare Edwards
v. Centex Real Estate Corp., supra, 53 Cal.App.4th at p. 35 [statement made
five years before litigation commenced not privileged] with >Neville v. Chudacoff, supra, 160
Cal.App.4th at p. 1269 [statements protected by anti-SLAPP statute when
litigation filed four months later].)
However, arbitration is not litigation; it is “a private alternative to
a judicial proceeding.” (>Century 21 Chamberlain & Associates v.
Haberman (2009) 173 Cal.App.4th 1, 5 (Century 21).) The court in >Century 21 held that the anti-SLAPP
statute does not protect the act of initiating a private agreement to
arbitrate. (Ibid.) The court reasoned
that arbitration is neither a judicial proceeding nor “an ‘official proceeding’
because it is a nongovernmental activity not reviewable by administrative
mandate or required by statute.” (>Ibid.)
Here, Nicholas and Langan voluntarily entered into an agreement to
arbitrate, and Langan wrote the demand letter pursuant to this agreement. Under Century
21, this act is not protected by the anti-SLAPP statute. The voluntary mediation, an act that is not
litigation and not protected under the anti-SLAPP statute, demonstrates that
the objective was to avoid litigation.href="#_ftn5" name="_ftnref5" title="">>[5]> Since Nicholas and Langan continue to rely on
informal procedures to try to resolve their dispute, it is reasonable to
conclude that they still seek to avoid litigation.
Defendants
also point to the tolling agreement to show the parties contemplated
litigation. But that agreement states
that its purpose is to allow the parties the opportunity to “amicably resolve”
any potential claims. Indeed, the
purpose of the tolling agreement was to avoid litigation.
Defendants
argue that by alleging that Langan sought representation for his “civil
matters,” “valid claims,” “potential case,” and “claims for damages,”
plaintiffs’ complaint effectively concedes that Langan contemplated
litigation. That Langan genuinely
believed he had a valid dispute against Nicholas does not mean there was a threat
of impending litigation. In other words,
Langan may very well have believed he had a potential case against Nicholas,
but neither he nor Nicholas proposed access to the courts for the purpose of
resolving their dispute. Rather, as we
have discussed, the evidence shows that a mutual goal was to avoid litigation,
and by retaining plaintiffs, Langan sought leverage to achieve that goal. (See Edwards
v. Centex Real Estate Corp., supra, 53 Cal.App.4th at p. 36
[litigation privilege attaches when “imminent access to the courts is seriously
proposed by a party in good faith for the purpose of resolving a dispute, and
not when a threat of litigation is made merely as a means of obtaining a
settlement”].) The complaint’s language
cited by defendants fails to establish “anything more than the mere possibility”
of litigation, not that either party was planning litigation when the Nicholas
offer was made. (Id. at p. 39, italics omitted.)
In
sum, defendants do not defeat the favorable evidence for plaintiffs, which
shows that neither Langan nor Nicholas seriously considered litigation during
the relevant time period. Although the
anti-SLAPP statute must be construed broadly, the Legislature did not intend it
to apply to purely private transactions merely having some remote connection to
an official proceeding. (E.g., >Hylton v. Frank E. Rogozienski, Inc. (2009)
177 Cal.App.4th 1264, 1272 [complaint by former client against his attorney
alleging ethical violations and breach of fiduciary duty not protected,
“[a]lthough petitioning activity is part of the evidentiary landscape within
which [the] claims arose”]; Kajima
Engineering & Construction, Inc. v. City of Los Angeles (2002) 95
Cal.App.4th 921, 931 [city’s complaint against contractor alleging claims
associated with the contractor’s improper bidding process not protected because
it did not implicate the contractor’s right to petition].) We conclude plaintiffs’ causes of action are
not barred by the anti-SLAPP statute.
DISPOSITION
The order of the trial court is
affirmed. Plaintiffs to have their costs
on appeal.
> NOT TO BE
PUBLISHED IN THE OFFICIAL REPORTS
EPSTEIN,
P. J.
We concur:
MANELLA, J.
SUZUKAWA, J.
id=ftn1>
href="#_ftnref1"
name="_ftn1" title="">[1]> All subsequent statutory
references are to the Code of Civil Procedure unless otherwise indicated.
id=ftn2>
href="#_ftnref2"
name="_ftn2" title="">[2]> Since the trial court in
this case denied defendants’ anti-SLAPP motion on the ground that the statute’s
“arising from” prong does not encompass their claims, it did not reach the
second step, involving the plaintiffs’ “probability of prevailing” in the
lawsuit. (Equilon Enterprises, >supra, 29 Cal.4th at p. 67.)