Loanvest I, LLC v. Utrecht

Filed 3/26/15 CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION THREE

LOANVEST I, LLC, Plaintiff and Appellant, A141564 v. PAUL F. UTRECHT et al., (Alameda County Super. Ct. No. RG12654982) Defendants and Respondents.

Plaintiff Loanvest I, LLC (Loanvest) appeals from the dismissal of its cause of action against its former attorneys, Paul F. Utrecht and Utrecht & Lenvin, LLP (collectively Utrecht), after the court granted Utrecht’s special motion to strike under the “anti-SLAPP”1 statute (Code Civ. Proc., § 425.16).2 Utrecht is being sued for malpractice by Loanvest, now under the control of James Madow, for allegedly disregarding the interests of Loanvest in order to protect the interests of the person who formerly controlled Loanvest in an action that Madow himself brought against Loanvest. After summarizing the complicated facts underlying the cause of action, we conclude, contrary to the trial court, that the malpractice claim fails to satisfy the first prong of the anti- SLAPP analysis. Thus, we do not reach the second prong of the analysis, leaving for consideration upon a summary judgment motion or other appropriate proceedings the multiple reasons for which the trial court concluded that Loanvest’s claim lacks merit.

1 “SLAPP” is an acronym for a strategic lawsuit against public participation. 2 All statutory references are to the Code of Civil Procedure.

1

Background The following facts, which are taken from the second amended complaint, appear to be undisputed. In 2008, Loanvest had a single member, South Bay Real Estate Commerce Group, LLC (South Bay), which was managed by Scott Carter, a relative of George Cresson, and subsequently by Cresson. In 2008, Carter, on behalf of South Bay, signed an “Operating Agreement” naming South Bay as Loanvest’s manager and providing that anyone purchasing a membership interest in Loanvest would have no voting or management rights, and that the manager could be removed only for breach of fiduciary duty and by a super-majority vote of Loanvest’s members. In 2009, Madow purchased a 70 percent interest in and became a member of Loanvest. In November 2011, Madow added Loanvest and South Bay as defendants in an action he had filed in February 2011 against other entities allegedly owned and controlled by Cresson. This action, referred to as the “San Francisco action” (Madow v. Post Construction Services, LP et al. (Super Ct. S.F. City and County, 2011, No. CGC-11- 508188)), asserted several claims against Cresson and entities Cresson allegedly controlled, including Loanvest. The claim arose, in part, out of a complex series of transactions involving a loan from Loanvest to Post Construction Services secured by an interest in certain real property in Oakland. Utrecht represented Loanvest in that action and successfully opposed Madow’s motion for a preliminary injunction. The requested injunction would have prevented Loanvest from paying out of the proceeds of the sale of Loanvest’s interest in the Oakland property “more than $300,000 . . . to discharge ‘Loanvest I expenses,’ the ‘vast majority’ of which was paid to Cresson’s lawyers in the San Francisco action,” and “more than $100,000” to other attorneys “for legal services totally unrelated to South Bay’s activities as Loanvest[’s] manager.” Pursuant to a settlement agreement, as of May 6, 2013, Madow replaced South Bay as the manager of Loanvest. Then, with Madow in control, Loanvest brought this action alleging that in successfully opposing Madow’s motion in the prior action, “Utrecht never represented Loanvest[’s] interests, instead egregiously breaching the duty of loyalty owed to his