Maverick Excavating, Inc. v. Dalk

“If indeed respondents' cross-complaint against appellant is a SLAPP suit, then the court's decision to not hear the merits of appellant's motion to strike deprives appellant of the monetary relief which the Legislature intended to give her, while at the same time it relieves respondents of the punishment which section 425.16 imposes on persons who use the courts to chill others' exercise of their constitutional rights. We therefore reverse the trial court's order denying appellant attorney's fees and costs, and remand the case for further proceedings on the issue of the merits of appellant's motion to strike and, depending on the ruling thereon, her request for fees and costs.” (Id., at p. 748; See also Sylmar Air Conditioning v.

Pueblo Contracting Services, Inc. (2004) 122 Cal.App.4th 1049, 1055 ["Nor is the issue of attorney fees and costs rendered moot even by an involuntary dismissal after a demurrer is sustained without leave to amend.”])

The same reasoning applies here. Despite that Defendant’s anti-SLAPP motion was rendered moot by the ruling on his motion to strike, the issue of attorney fees remains.

2. Objections Defendant’s objections are overruled.

3. Defendant’s Anti-SLAPP motion

Defendant moved pursuant to CCP section 425.16 to strike paragraphs 152, 153, and 159- 166 of the cause of action for fraud, and 173 through 183 of the third cause of action for conspiracy to commit fraud alleged in the Second Amended Complaint ("SAC") filed by Plaintiffs.

A determination on an Anti-SLAPP motion is effectuated by a series of shifting burdens: “At the first step, the moving defendant bears the burden of identifying all allegations of protected activity, and the claims for relief supported by them. When relief is sought based on allegations of both protected and unprotected activity, the unprotected activity is disregarded at this stage. If the court determines that relief is sought based on allegations arising from activity protected by the statute, the second step is reached.

There, the burden shifts to the plaintiff to demonstrate that each challenged claim based on protected activity is legally sufficient and factually substantiated. The court, without resolving evidentiary conflicts, must determine whether the plaintiff's showing, if accepted by the trier of fact, would be sufficient to sustain a favorable judgment. If not, the claim is stricken. Allegations of protected activity supporting the stricken claim are eliminated from the complaint, unless they also support a distinct claim on which the plaintiff has shown a probability of prevailing.” (Baral v.

Schnitt (2016) 1 Cal.5th 376, 396.)

a. Alleged fraudulent time sheets and employment letter Paragraphs 152, 153, and 159-166 were part of Plaintiffs’ fraud cause of action. Paragraphs 152 and 153 allege Defendant intended to present further falsified timesheets in an effort to be paid even more in this lawsuit and that he intended to present a forged employment letter to establish further claims for benefits. Defendant argued that these allegations refer to statements made in connection with or in preparation of litigation and were subject to being stricken under CCP section 425.16. Defendant filed a declaration that the alleged further falsified timesheets and forged employment letter were submitted in anticipation of Defendant’s wage and hour claim with the California Labor Commissioner or in this litigation.

Paragraphs 159 through 166 refer to an alleged “fake estimate” presented after the parties’ efforts of compromise failed. Defendant argued this was relayed as part of settlement communications in connection with or preparation of this litigation. Defendant provided the declaration of Susan Riggle stating that the supposedly fake estimate was provided to Plaintiffs on April 5, 2024, in the settlement conference. Ms. Riggle stated in her declaration that it was, in fact, genuine and executed by Garcia Paving, and represented evidence of loss to Mustang Court from the Plaintiffs’ defective performance.

Defendant cited two cases in support of his section 425.16 motion to strike these allegations: “Kashian v. Harriman (2002) 98 Cal.App.4th 892, 908 (pre-litigation statements made in connection with potential environmental litigation were ‘statements made in connection with or in preparation for litigation are subject to section 425.16’); Baral v. Schnitt (2016) 1 Cal.5th 376, 384- 35 (defendant’s burden to show challenged claim arises from activity protected by section 425.16).” (Anti-SLAPP memo, 8:14-19.)

It is difficult to understand how Defendant concludes that the citation to these two cases alone, without any discussion of how they apply to the present case, meets his burden on this motion. (See Cal. Rules of Court, Rule 3.1113(b) [“The memorandum must contain a statement of facts, a concise statement of the law, evidence and arguments relied on, and a discussion of the statutes, cases, and textbooks cited in support of the position advanced.”])

In Kashian, plaintiff filed a lawsuit alleging that defendant Harriman had engaged in unfair and deceptive business practices and defamation. The thrust of the complaint included allegations that Harriman had created sham entities that he then used to file environmental claims “to extort settlements and reap financial benefits to Harriman.” Id at 902. The complaint also alleged that Harriman made defamatory statements against plaintiff in a letter he sent to the Attorney General. Id. Defendant Harriman then filed an anti-SLAPP motion in which he highlighted all these allegations and argued that both his 6 environmental litigation activities in his letter to the Attorney General were absolutely privileged (Civ.

Code, §47, subd. (b)). Id. at 902-903. The court agreed that such activities constituted protected activity under CCP §425.16 and Defendant Harriman passed the first stage of an Anti- SLAPP analysis.

Baral v. Schmitt, a California Supreme Court case, provided a more expansive analysis of a moving party’s burden on an anti-SLAPP motion. Schmitt filed an anti-SLAPP (Strategic Lawsuit Against Public Participation) motion to strike certain allegations, arguing they arose from protected activity under California’s anti-SLAPP statute (Code Civ. Proc. § 425.16). The Supreme Court held that an anti-SLAPP motion may be used to strike allegations of protected activity even if it does not defeat the entire cause of action. Baral v. Schmitt (2016) 1 Cal.5th 376, 393. However, allegations of protected activity that merely provide context, without supporting a claim for recovery, cannot be stricken under the anti-SLAPP statute. (Id. at p. 394.)

In Baral court also required specificity from the moving party as to what allegations regarding protected activities were at issue in the motion. Alternatively stated, there is a specificity which a moving party needs to meet in order to establish that the allegations or causes of action that have been asserted against them are in fact related to protected activity. Conclusory arguments are insufficient.

Plaintiffs’ fraud cause of action is based upon allegedly falsified timesheets that Defendant then allegedly submitted while he was employed with Plaintiffs and for money allegedly paid to Defendant which was intended for another contractor. (SAC, ¶151.) Plaintiffs explain that they thought it was reasonable to include information about additional timesheets Defendant intended to use in this lawsuit as further evidence of Defendant’s falsification of time records. The Court’s prior ruling on the motion to strike these types of allegations on the basis that they do not establish the element of reliance for fraud does not serve as proxy for also establishing this as protected activity.

With respect to the allegedly forged employment agreement, Plaintiffs state it was presented to them on November 1, 2023—prior to this action and as part of facts supporting their claims against Defendant in this lawsuit. Plaintiffs argue that during the pendency of this action, Defendant presented a new version of the agreement, backdating his own signature to April 23, 2023, and explained he intended to use the backdated copy with the Plaintiffs’ allegedly forged signature in this litigation as proof of an agreement that Plaintiffs argue was never reached.

Plaintiffs’ inclusion in the SAC of evidence Defendant intended to present in support of his defense and the allegations based upon an allegedly fake estimate presented during settlement discussions were irrelevant and extraneous. While these allegations do reference litigation activities that Plaintiffs believed Defendant would make, the cause of action for fraud does not seek redress based upon those litigation activities or settlement negotiations.

The central purpose of CCP section 425.16 is screening out meritless claims that arise from protected activity, before the defendant is required to undergo the expense and intrusion of discovery. (Baral v. Schnitt (2016) 1 Cal.5th 376, 392.) However, allegations of protected activity that merely provide context, without supporting a claim for recovery, cannot be stricken under the anti-SLAPP statute. (Id. at p. 394.) Allegations subject to section 425.16 are those that seek redress based upon protected activity.

Here, Plaintiffs sought exemplary damages as a multiplier of all amounts paid to Defendant, prior to November 27, 2023, and, specifically, the $30,937 paid to Defendant that was intended for contractor Garcia. (SAC, ¶¶161-166.) Thus, the allegations regarding the allegedly false estimate merely add context based upon supporting evidence. Therefore, section 425.16 is not applicable as there is no cause of action based upon the allegations related to protected activity. (See Baral, supra, at pp. 394-395.)

Paragraphs 173 through 183 are part of Plaintiffs’ fourth cause of action for conspiracy to commit fraud. While some of the allegations suggest that Plaintiffs are seeking redress for the presentation of forged documents, as it alleges Plaintiffs were harmed by these actions, this cause of 7 action only seeks damages based upon pre-litigation billing issues, not litigation activities. (SAC, ¶185.) Therefore, these allegations were also not the basis of a cause of action seeking to chill the valid exercise of Plaintiff’s constitutional rights of freedom of speech and petition for the redress of grievances.

4. Conclusion and Order Defendant has not met his burden to establish that the allegations were subject to being stricken under CCP section 425.16; i.e., that they constituted a “cause of action,” which included a request for damages based upon specific allegations. Accordingly, Defendant’s request for attorney fees for bringing the section 425.16 motion is DENIED. Plaintiffs’ counsel is directed to submit a written order to the court consistent with this ruling and in compliance with Cal. Rules of Court, Rule 3.1312.

3. 24CV06350, Looney v. Itaewon Street, a California Corporation

(TENTATIVE ISSUED BY HON. DANA B. SIMONDS)

IF ORAL ARGUMENT IS REQUESTED, MATTER WILL BE HEARD IN DEPT.

18. PLEASE USE DEPT. 18’S ZOOM LOGIN INFORMATION.

Plaintiff Gary E. Looney dba Collectronics of California (“Plaintiff”) moves for an order appointing Landon McPherson as receiver to take possession of and, if necessary, sell the liquor license of defendant Liquor King, LLC (“Judgment Debtor”) in order to carry out the judgment entered in this case in the amount of $6,175.96.

Specific statutory procedures are established for enforcement of money judgments. This includes the appointment of a receiver after judgment to carry the judgment into effect. (CCP section 564(b)(3).) The judgment debtor's interest in an alcoholic beverage license may be applied to the satisfaction of a money judgment. (CCP § 708.630(a).)

A trial court must consider the availability and efficacy of other remedies in determining whether to employ the extraordinary remedy of a receivership. (City & Cty. of San Francisco v. Daley (1993) 16 Cal.App.4th 734, 745.) In making this decision, the court must depend upon competent and admissible evidence submitted by the parties, and not conclusions and hearsay. (McCaslin v. Kenney (1950) 100 Cal.App.2d 87, 94.)

“California rigidly adheres to the principle that the power to appoint a receiver is a delicate one which is to be exercised sparingly and with caution.” (Morand v. Superior Ct. (1974) 38 Cal.App.3d 347, 351.) “It is said by the state's courts that the appointment of a receiver is ‘an extraordinary and harsh,’ and ‘delicate,’ and ‘drastic,’ remedy to be used ‘cautiously and only where less onerous remedies would be inadequate or unavailable...’” (Ibid.)

Mere difficulty in trying to collect a debt is not sufficient basis for the court to appoint a receiver. (Medipro Medical Staffing LLC v. Certified Nursing Registry, Inc. (2021) 60 Cal.App.5th 622, 628-629.) The Medipro Court explained, “Medipro's evidentiary showing demonstrated that it had, at most, encountered some difficulty in its initial efforts to collect on its money judgment. If this was sufficient to constitute the ‘necessity’ required to justify the ‘extraordinary’ remedy of the appointment of a receiver to take over a judgment debtor's business, it is difficult to see how the appointment of receivers would not become a routine part of the collection of judgments—a result at odds with the solid wall of precedent holding to the contrary.”

On April 2, 2025, judgment was entered in this action for the above stated amount. According to Plaintiff’s declaration, Vick S. Arora is the personal guarantor of Judgment Debtor. 8