Harkham Industries v. Jade Fashion
Appellant Harkham Industries, Inc. appeals from the trial court’s order granting the special motion to strike brought by respondents Jade Fashion & Co., Inc., Resch Polsert & Berger LLP, and Sandra Khalili pursuant to Code of Civil Procedure section 425.16.[1] This appeal arises out of a dispute over monies allegedly owed by Harkham Industries to Jade Fashion for the purchase of certain goods. Jade Fashion filed a civil action against Harkham Industries for breach of contract and other related claims based on allegations that Harkham Industries breached the parties’ written agreement by failing to make timely payments due under the terms of the agreement. While that action was pending, counsel for Jade Fashion sent a letter to counsel for Harkham Industries stating that a $30,000 check issued by Harkham Industries had been returned due to unavailable funds, and demanding that the unpaid amount be wired to Jade Fashion by the following business day. After making that payment and then confirming that the original check had in fact been paid, Harkham Industries filed a cross-complaint against Jade Fashion and its attorneys for fraud, conversion, and unjust enrichment.
The trial court granted the special motion to strike the cross-complaint. On appeal, Harkham Industries contends that the trial court erred in granting the motion because the allegedly fraudulent statements made in the letter did not pertain to any payments at issue in the underlying breach of contract action, constituted criminal conduct falling outside the scope of section 425.16, and were not protected by the litigation privilege. We conclude that the trial court properly granted the special motion to strike, and accordingly, affirm.
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