Zelznick v. Zacks

Filed 12/9/08 Zelznick v. Zacks CA1/2

NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION TWO

Appellant J.K. Selznick appeals from orders granting special motions to strike her original and amended complaints filed against her former attorney, Andrew M. Zacks (Zacks) and his law firm, Zacks, Utrecht & Leadbetter, P.C. (ZUL), motions made pursuant to the anti-SLAPP statute. (Code Civ. Proc., 425.16)[1] Selznick also appeals from related orders awarding attorney fees and costs to Zacks and ZUL under that statute. ( 425.16, subd. (c).) We conclude that the gravamen of the causes of action in both complaints is litigation-related conduct protected under the anti-SLAPP statute and that Selznick did not meet her burden of demonstrating a likelihood of prevailing on her claims. We thus affirm.

BACKGROUND

A. Selznick I: The Default Judgment

On April 18, 2006, ZUL filed a complaint against its former client, Selznick, seeking to recover unpaid attorney fees (Selznick I).[2] On May 2, 2006, ZUL filed a proof of service of the summons and complaint, representing that Selznick was personally served on April 27, 2006, at her house in San Francisco. On June 16, 2006, ZUL filed a request for entry of default. The court entered Selznicks default the same day.

Selznick asserts that the May 2, 2006 proof of service is false. She alleges that on April 27, 2006, she was at her primary residence in Los Angeles and consequently could not have been served with papers in San Francisco on that date. However, she has never submitted a declaration supporting this allegation in any of the relevant proceedings.

Selznick admits that by late June 2006, she had learned about the entry of default in Selznick I. In response, she hired a new attorney, Michael McCloskey, who advised her to wait until a default judgment was filed against her before taking any action. McCloskey explained that he gave this advice after telephoning Zacks in July 2006 to ask him to stipulate to set aside the default. According to McCloskey, Zacks refused to stipulate, and said he wanted to punish Selznick and force her to incur as much money in attorney fees as possible.

On September 5, 2006, Selznick served, but did not file, a case management statement in Selznick I. This statement said that Selznick had not been served, and that a motion was pending to set aside default and for leave to file a cross-complaint for breach of contract, legal malpractice, and fraud. No such motion was ever filed.

On January 4, 2007, the trial court entered a default judgment against Selznick in the amount of $35,052.83.

B. Selznick II: Breach of Contract and Fraud Against Zacks

Instead of filing the promised motion to set aside default in Selznick I, on October 31, 2006, Selznick filed a complaint against Zacks, as an individual, for breach of contract and fraud (Selznick II). The complaint in Selznick II alleged that from July 2004 through February 2005, Zacks breached a contract with Selznick to provide her with legal services to evict tenants from a house she owned in San Francisco. In particular, she alleged that Zacks embarked on a course of conduct designed to inflate his billable hours and to exploit [Selznick] financially by filing a legally defective complaint in an unlawful detainer action against the tenants of the San Francisco house, and by failing to secure their eviction. In her fraud cause of action, Selznick alleged that Zacks made false representations that he would represent her interests by filing the unlawful detainer action to evict the tenants and would represent her in an action brought against her by the tenants. Instead, Zacks allegedly intended to exploit [Selznick] financially and to inflate his billable hours unfairly by churning the cases and by dragging them out over time and without accomplishing any benefit to Selznick.

On December 18, 2006, Zacks filed an anti-SLAPP motion against the breach of contract claim in Selznick II. According to Selznick,[3] Zacks argued in his motion to strike that the breach of contract claim was an end-run around a legal malpractice action and should be barred by the one-year statute of limitations for legal malpractice.[4] Selznick did not oppose Zackss motion, and on January 11, 2007, the court granted it.[5]

On March 26, 2007, Zacks moved for judgment on the pleadings as to the remaining fraud claim in Selznick II. Zacks argued in this motion that the matter was res judicata based on the default judgment entered in Selznick I, because the fraud claim could have been raised either as an affirmative defense or as a cross-claim in Selznick I. On April 23, 2007, the trial court granted the motion, dismissing the fraud claim. Judgment in Selznick II was entered for Zacks on April 30, 2007. Selznick never filed an appeal from the judgment in Selznick II.

C. Selznick III: This Action

On July 3, 2007, Selznick filed the complaint in this action against both Zacks and ZUL, seeking to set aside the default judgment in Selznick I as void for lack of personal jurisdiction over Selznick (Selznick III). The complaint was accompanied by a declaration of attorney McCloskey in which he stated that the failure to seek relief from the default and default judgment in Selznick I were completely the result of my own mistake, inadvertence, and neglect. Selznick apparently sought to file the action within six months of the entry of default judgment in Selznick I pursuant to section 473, subd. (b).[6]

On August 31, 2007, Zacks and ZUL filed anti-SLAPP motions against the complaint in Selznick III. Selznick did not file an opposition to the motions, but instead filed an amended complaint on the day before the hearing on the motions. This amended complaint was accompanied by another declaration of fault by McCloskey, identical in content to the declaration filed with the original complaint.

The motion came on for hearing on September 25, 2007. During the hearing on these motions, Selznicks counsel told the court that he could not speak to the SLAPP motions, because I frankly havent researched it that extensively. After the court indicated that it would grant the motions because they were unopposed, Selznicks counsel asked the court which SLAPP motion was at issue and what remedy the court was granting. Selznicks counsel then told the court that he had been under the false impression that the anti-SLAPP motions were the same as demurrers, and asked for a two‑week continuance to oppose the motions. The court denied the request. The trial court granted both motions, striking the original complaint in Selznick III.

On November 5, 2007, the court granted Zackss unopposed motion for attorney fees pursuant to the anti-SLAPP statute. ( 425.16, subd. (c).)

On October 9, 2007, Zacks and ZUL filed motions to strike both causes of action of the amended complaint in Selznick III. The first cause of action of the amended complaint was identical to the sole cause of action in the original complaint: both sought to set aside the default judgment in Selznick I, and both alleged that Zacks and ZUL had accomplished their malicious objective of punishing [Selznick] with unnecessary legal fees by obtaining the default judgment through their own extrinsic fraud on the court.

However, the second cause of action sought to set aside the judgment in Selznick II. In Selznicks words, the amended complaint sought to set aside two void judgments, including the judgment on the pleadings in Selznick II. According to the amended complaints second cause of action, the judgment in Selznick II was also void because it was based on the void default judgment in Selznick I: [t]he basis for [the judgment in Selznick II] was that [Selznicks] action was barred by res judicata and collateral estoppel on account of the default judgment in the underlying action, which was obtained as a result of the extrinsic fraud or mistake of [Zacks and ZUL] . . . [] . . . in that the underlying judgment was void for lack of personal jurisdiction over Selznick.

This time around, Selznick filed an opposition to the anti-SLAPP motions, but did not file any declarations or other evidence in support. Selznick argued in her opposition that the gravamen of her action was that she was never served with the summons or complaint in Selznick I.

At the first hearing on the motions, on October 31, 2007, the court was inclined to deny the motions, based on the relief Selznick sought in the amended complaintin the courts words, to basically over turn the prior two results. Counsel for ZUL and Zacks argued that the gravamen of the amended complaint was obtaining a default judgment based on an allegedly false proof of service, the same activity which our Supreme Court held to be protected in Rusheen v. Cohen (2006) 37 Cal.4th 1048 (Rusheen). Counsel also emphasized that Selznick had presented no evidence that she was not served with the summons and complaint in Selznick I. The court continued the matter for a second hearing so that it could review Rusheen.

The second hearing occurred on November 5, 2007. During that hearing, Selznicks counsel requested a continuance in order to prepare a declaration to the effect that Selznick was in Los Angeles on the date the proof of service represented service was effected in San Francisco. The court refused the request, noting that the facts related to service have been the central issue from the time the action began. The court proceeded to grant the motions to strike the amended complaint in Selznick III, explaining that it had gone back and read the [amended complaint] and tried to focus on what would be required to establish the complaint. And for the reasons stated, I believe it brings into play the anti-SLAPP statute. In its orders, the court also noted that Selznick had not presented any evidence in support of her contention that she was not served in Selznick I. The court also granted Zackss motion for fees pursuant to the anti-SLAPP statute.[7] ( 425.16, subd. (c).)

DISCUSSION

A SLAPP suit has been described as a meritless suit filed primarily to chill the defendants exercise of First Amendment rights.  (Macias v. Hartwell (1997) 55 Cal.App.4th 669, 672.) The anti-SLAPP statute was a response to the pervasive use of these suits to discourage citizens from seeking governmental action. (Ludwig v. Superior Court (1995) 37 Cal.App.4th 8, 14 (Ludwig).) Under the statute, a cause of action against a person arising from any act of that person in furtherance of the persons 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).)

In order for a cause of action to be subject to a motion to strike under section 425.16, two prongs must be satisfied. First, the defendant must show that the cause of action against the defendant is one arising from any act of that [defendant] in furtherance of the [defendants] right of petition or free speech . . . . ( 425.16, subd. (b)(1), italics added; see also Thomas v. Quintero (2005) 126 Cal.App.4th 635, 645 (Thomas).) If the cause of action meets this threshold criterion, then the burden shifts to the plaintiff to demonstrate a probability of prevailing on the claim. ( 425.16, subd. (b)(1); Thomas, supra, 126 Cal.App.4th at p. 645.) A  cause of action that satisfies both prongs of the anti-SLAPP statutei.e., that arises from protected speech or petitioning and lacks even minimal meritis a SLAPP subject to being stricken under the statute.  (Ibid.)

We review de novo the orders granting the section 425.16 special motions to strike. (Thomas, supra, 126 Cal.App.4th at p. 645.) We apply our independent judgment to determine whether Selznicks causes of action arose from acts by Zacks or ZUL in furtherance of their right of petition or free speech. (Ibid.) In so doing, we consider the pleadings, and supporting and opposing affidavits . . . upon which the liability . . . is based. [Citation.] 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 defendants 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.)

A. First Prong

Primarily, Zacks and ZUL argue that Selznick may not now argue that the court erred in granting those motions, relying on the fact that Selznick did not file any opposition to the motions to strike the original complaint in this action. However, Selznicks attorney did appear at the hearing to argue against granting the motions. (Compare Bell v. American Title Ins. Co. (1991) 226 Cal.App.3d 1589, 1602 [where appellants failed not only to file timely oppositions to the motion but also failed to appear at the hearing, noting that [f]ailure to register a proper and timely objection to a ruling or proceeding in the trial court waives the issue on appeal].) Moreover, Zacks and ZUL, as the moving defendants, bear the initial burden under the anti-SLAPP statute to show that the complaints lone cause of action arose from protected activity. ( 425.16, subd. (b)(1), italics added; Thomas, supra, 126 Cal.App.4th at p. 645.) We thus turn to the merits of Selznicks appeal.

Selznick argues that the anti-SLAPP statute does not apply to either the original or amended complaint because the gravamen of her causes of action was that she was never served with the summons or complaint in Selznick I, and that consequently the resulting judgments in both Selznick I and II were void. She emphasizes that she does not challenge any conduct by Zacks and ZUL, and does not seek to impose any liability on them. Our independent examination of the complaints leads to a contrary conclusion, that the  the principal thrust or gravamen  of the causes of action is alleged litigation conduct by ZUL and Zacks protected under the anti-SLAPP statute. (See Thomas, supra, 126 Cal.App.4th at p. 653 [the principal thrust or gravamen  determines whether the anti-SLAPP statute applies ].)

In general, filing litigation or otherwise seeking judicial action is privileged conduct under the anti-SLAPP statute. (Ludwig, supra, 37 Cal.App.4th at p. 19;  425.16, subd. (e)(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].) It follows that communicative conduct protected by the litigation privilege is also protected under, and triggers application of, the anti-SLAPP statute. (Sylmar Air Conditioning v. Pueblo Contracting Services, Inc. (2004) 122 Cal.App.4th 1049, 1058 (Sylmar Air Conditioning).) The litigation  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 have some connection or logical relation to the action.  (Ibid.) Protected communicative conduct includes the filing, funding, and prosecution of a civil action and includes qualifying acts committed by attorneys in representing clients in litigation. (Rusheen, supra, 37 Cal.4th at p. 1056.)

In Rusheen, supra, 37 Cal.4th 1048, our Supreme Court specifically held that filing allegedly false declarations of service to obtain a default judgment is protected by the litigation privilege. (Id. at p. 1052.) There, just as here, the attorney filed a declaration of service signed by a process server, which was later used to obtain [the plaintiffs] default and then a default judgment against the plaintiff. (Id. at p. 1053.) Rusheen later filed a cross-complaint against the attorney for abuse of process, alleging among other things that the attorney had failed to serve the complaint properly, took an improper default against him without proper notice, and filed false declarations on the issue of service. (Id. at p. 1054.) The Supreme Court concluded that the gravamen of the cause of action in the cross-complaint was the procurement of the judgment based on the use of allegedly perjured declarations of service. (Id. at p. 1062.)

Rusheen is heavily relied on by Zacks and ZUL, whose brief describes it this way: Except for the relief sought, Selznicks complaint is identical to Rusheen. . . .[8] We agree and conclude that Rusheen is dispositive.

Here, as in Rusheen, the causes of action at issue are based on the alleged filing of a false declaration of service and subsequent, related litigation activities. The principal thrust of both complaints is the allegation that ZUL filed a false proof of service and that Zacks and ZUL thereby accomplished their malicious objective of punishing [Selznick] with unnecessary legal fees by obtaining the default judgment in Selznick I through their own extrinsic fraud on the court. The second cause of action of the amended complaint relies upon this same conduct to assert that the judgment in Selznick II was also void; it was allegedly based on the default judgment in Selznick I, which in turn was allegedly obtained through the fraud of Zacks and ZUL. Consequently, the causes of action arose from conduct protected under the anti-SLAPP statute.

Selznicks assertion that neither her complaint nor her amended complaint seeks to hold Zacks and ZUL liable for damages resulting from the filing of a false proof of service is irrelevant to our analysis. Although the prayers of both complaints seek primarily declaratory relief, it is well established that the relief sought in a complaint is not determinative of whether the anti-SLAPP statute applies to a particular cause of action. (See Marlin v. Aimco Venezia, LLC (2007) 154 Cal.App.4th 154, 162 [noting that an anti-SLAPP motion is directed at a cause of action, as opposed to the remedy sought, and rejecting defendants argument that the plaintiffs prayer for injunctive relief triggered application of the anti-SLAPP statute].)

Selznick also argues that the anti-SLAPP statute was never intended to repeal . . . section 473 (b). Our conclusion here does not have this effect, but merely shifts the burden to Selznick to establish the second prong: to demonstrate a probability of prevailing on her claims. ( 425.16, subd. (b)(1); Thomas, supra, 126 Cal.App.4th at p. 645.) We also noteas was true of the cross-complainant Rusheenthat Selznick had adequate alternative remedies to filing this action against Zacks and ZUL, including moving to set aside the default judgment in the underlying action. (Rusheen, supra, 37 Cal.4th at p. 1064.) Selznick admits that she was aware of the entry of default shortly after it occurred. She could have moved in Selznick I under section 473 or 473.5[9]to set aside the default or default judgment without triggering the anti-SLAPP statute. In fact, before judgment was entered in Selznick I, her counsel indicated his intent to bring such a motion. For unknown reasons, he chose not to do so and instead filed this action against Zacks and ZUL.[10]

B. Second Prong

As discussed above, the conduct of which Selznick complainsthe filing of a false proof of servicewas within the litigation privilege in Civil Code section 47, subdivision (b). This privilege is referred to as absolute. Since it is, there can be no liability. (See generally 5 Witkin, Summary of Cal. Law (10th ed. 2005) Torts,  561, p. 818.) But even if there could be, Selznick fails to make the showing required of her under prong two.

 In order to establish a probability of prevailing on the claim (Code Civ. Proc.,  425.16, subd. (b)(1)), a plaintiff responding to an anti-SLAPP motion must  state[] and substantiate[] a legally sufficient claim.  [Citations.] Put another way, the plaintiff must demonstrate that the complaint is both legally sufficient and supported by a sufficient prima facie showing of facts to sustain a favorable judgment if the evidence submitted by the plaintiff is credited.   (Rusheen, supra, 37 Cal.4th at p. 1056.)

Zacks and ZUL filed in Selznick I, and in this action with their motions to strike, a proof of service indicating that Selznick was personally served with summons and complaint in Selznick I on April 27, 2006 in San Francisco. The filing of this proof of service created a rebuttable presumption that Selznick was so served. (Floveyor Internat., Ltd. v. Superior Court (1997) 59 Cal.App.4th 789, 795.) And Selznick never submitted any evidence to show that she was not. Selznick cannot, and does not, rely on the allegations of her unverified complaints, or on her attorneys declarations of fault supporting those complaints, to make the required prima facie showing. (See Salma v. Capon (2008) 161 Cal.App.4th 1275, 1289 [The prima facie showing of merit must be made with evidence that is admissible at trial; unverified allegations or allegations not based on personal knowledge are insufficient].) This failure of proof is fatal to Selznicks challenge to the anti-SLAPP motions, because the claimed failure to serve Selznick is central to her claims that the judgments in Selznick I and Selznick II are void.

Recognizing the significance of this failure of proof, Selznick argues that the trial court abused its discretion by denying her counsels request for a continuance in order to provide evidence of her presence in Los Angeles on April 27, 2006. We conclude otherwise. The court had inherent power to exercise its discretion and control over these proceedings, including the discretion whether to allow Selznick additional time to submit the missing evidence. (See Weiss v. Chevron, U.S.A., Inc. (1988) 204 Cal.App.3d 1094, 1098-1099.) Significantly, counsel for Selznick never explained why he did not provide the evidence with his opposition or before the second and final hearing on the motions. As the court correctly observed, the facts related to service had been the central issue from the time the action began. Indeed, Selznick had already been given a second bite at the apple: she amended her complaint in response to the first set of motions to strike.[11] As Selznick acknowledges, the anti-SLAPP motions brought with respect to the original and amended complaint were largely identical. In sum, Selznick had two opportunities to submit evidence regarding service, but never did.[12]

C.                Orders Awarding Attorney Fees and Costs

Selznick also appeals from the orders awarding attorney fees and costs in conjunction with the anti-SLAPP motions at issue. She does not challenge the specific amounts awarded in these orders, but instead argues only that the underlying motions to strike should not have been granted. We have rejected those arguments and have concluded that the trial court properly granted the anti-SLAPP motions. The anti-SLAPP statute makes the award of attorney fees and costs mandatory for a prevailing defendant. ( 425.16, subd. (c); Sylmar Air Conditioning, supra, 122 Cal.App.4th at p. 1059.) Consequently, there is no basis to reverse the fees and costs orders on appeal. (See Leader v. Health Industries of America, Inc. (2001) 89 Cal.App.4th 603, 611 [where plaintiffs had presented no argument or authority in support of their contention that the trial court had erred in particular aspect, concluding that aspect of plaintiffs appeal ha[d] been abandoned].)

DISPOSITION

The orders granting Zackss and ZULs motions to strike, and the related orders awarding attorney fees and costs, are affirmed. Zacks and ZUL shall recover their costs on appeal.

_________________________

Richman, J.

We concur:

_________________________

Kline, P.J.

_________________________

Haerle, J.

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[1] All further statutory references are to the Code of Civil Procedure unless otherwise noted. Section 425.16 is the anti-SLAPP statute. SLAPP is an acronym for strategic lawsuit against public participation. (Navellier v. Sletten (2002) 29 Cal.4th 82, 85 (Navellier).)

[2] ZUL alleged it was the predecessor in interest of the Law Offices of Andrew M. Zacks, which entered into a contract with Selznick to perform legal services.

[3] The record on appeal does not include this anti-SLAPP motion, nor does it include a transcript of the hearing on the motion.

[4] Selznick contends that ZUL purposefully waited to sue her for unpaid fees in Selznick I until the statute of limitations on legal malpractice had expired.

[5] Zacks also successfully moved for attorney fees under the anti-SLAPP statute. ( 425.16, subd. (c).)

[6] Section 473, subdivision (b) provides in relevant part that a court may, upon any terms as may be just, relieve a party . . . from a judgment . . . taken against him or her through his or her mistake, inadvertence, surprise, or excusable neglect. Application for this relief . . . shall be made within a reasonable time, in no case exceeding six months, after the judgment . . . was taken. . . . Notwithstanding any other requirements of this section, the court shall, whenever an application for relief is made no more than six months after entry of judgment, is in proper form, and is accompanied by an attorneys sworn affidavit attesting to his or her mistake, inadvertence, surprise or neglect, vacate any . . . resulting default judgment . . . entered against his or her client, unless the court finds that the default . . . was not in fact caused by the attorneys mistake, inadvertence, surprise, or neglect.

[7]Although Selznick also purports to appeal from an order granting ZULs motion for attorney fees and costs with respect to its motion to strike the amended complaint, we cannot find such an order in the record nor any such motion filed by ZUL.

[8] Despite that, Selznicks reply brief does not even mention, must less discuss, Rusheen.

[9] Section 473.5 provides in relevant part that [w]hen service of a summons has not resulted in actual notice to a party in time to defend the action and a default or default judgment has been entered against him or her in the action, he or she may serve and file a notice of motion to set aside the default or default judgment and for leave to defend the action. The notice of motion shall be served and filed within a reasonable time, but in no event exceeding the earlier of: (i) two years after entry of a default judgment against him or her; or (ii) 180 days after service on him or her of a written notice that the default or default judgment has been entered. ( 473.5, subd. (a).)

[10] Similarly, Selznick chose not to appeal from the judgment entered in Selznick II.

[11] Amending her complaint immediately before the hearing on the first set of motions to strike was improper and arguably should have resulted in striking the amended complaint at the time that the first complaint was stricken. (See Sylmar Air Conditioning, supra, 122 Cal.App.4th at p. 1055 [there is no express or implied right in section 425.16 to amend a pleading to avoid a SLAPP motion]; Salma v. Capon, supra, 161 Cal.App.4th at pp. 1280, 1294-1295 [where the plaintiff attempted to avoid a motion to strike by amending the challenged complaint before the motion to strike was heard, the trial court should have ordered the automatic dismissal of the amended claims after having stricken the original complaint].)

[12] Another arguable infirmity is the fact that Zacks is named as an individual defendant in both the complaint and amended complaint, despite that the default judgment in Selznick I was entered in favor of ZUL only, not Zacks. As Zacks and ZUL argue, because Zacks was not a party to Selznick I and did not obtain a judgment there, the claims in Selznick III are legally insufficient with respect to Zacks. However, Selznicks decision to sue Zacks individually, and then to allege his participation in the malicious objective of punishing Selznick with unnecessary legal fees by obtaining the default judgment with a false proof of service, further supports our conclusion about the gravamen of Selznicks claims.