Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca9-13-15544/USCOURTS-ca9-13-15544-0/pdf.json

Parties Involved:
Lisa J. Borodkin
Appellee
Xcentric Ventures, LLC
Appellant

Document Text:

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

XCENTRIC VENTURES, LLC, an

Arizona limited liability company,

Plaintiff-Appellant,

v.

LISA J. BORODKIN,

Defendant-Appellee.

No. 13-15544

D.C. No.

2:11-cv-01426-

GMS

XCENTRIC VENTURES, LLC, an

Arizona limited liability company,

Plaintiff-Appellant,

v.

LISA J. BORODKIN; RAYMOND

MOBREZ; ILIANA LLANERAS,

Defendants-Appellees.

No. 13-16271

D.C. No.

2:11-cv-01426-

GMS

ORDER AND

OPINION

Appeal from the United States District Court

for the District of Arizona

G. Murray Snow, District Judge, Presiding

Argued and Submitted

June 10, 2015—San Francisco, California

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2 XCENTRIC VENTURES V. BORODKIN

Filed August 25, 2015

Before: Barry G. Silverman, Ronald M. Gould,

and Andrew D. Hurwitz, Circuit Judges.

Order;

Per Curiam Opinion

SUMMARY*

Malicious Prosecution

The panel redesignated the memorandumdisposition filed

June 15, 2015 as a per curiam opinion; and affirmed the

district court’s summary judgment and judgment on the

pleadings in favor of defendants Raymond Mobrez and Iliana

Llaneros, and Fed. R. Civ. P. 12(b)(6) dismissal of defendant

Lisa Borodkin in Xcentric Ventures, LLC’s malicious

prosecution action.

The panel held Xcentric could not prove an element of its

malicious prosecution claims under California law, that the

underlying claims were brought or continued without factual

or legal probable cause.

* This summary constitutes no part of the opinion of the court. It has

been prepared by court staff for the convenience of the reader.

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XCENTRIC VENTURES V. BORODKIN 3

COUNSEL

David S. Gringas (argued), Gringas Law Office, PLLC,

Phoenix, Arizona, for Plaintiff-Appellant.

David Meyer (argued), San Diego, California, for

Defendants-Appellees Mobrez and Llaneras.

Damion D. Robinson, Van Vleck, Turner, & Zaller, LLP, Los

Angeles, California;LisaBorodkin (argued), Redondo Beach,

California, for Defendant-Appellee Borodkin.

ORDER

Raymond Mobrez and Iliana Llaneras’ Request for

Reconsideration of Order Denying Request for Publication is

GRANTED. The Memorandum disposition filed June 15,

2015, is redesignated as a per curiam opinion.

Lisa Borodkin’s Request for Judicial Notice in connection

with the request for reconsideration is DENIED AS MOOT.

OPINION

PER CURIAM:

Xcentric Ventures appeals the district court’s grant of

summary judgment and judgment on the pleadings in favor of

defendants Mobrez and Llaneras and Rule 12(b)(6) dismissal

of defendant Borodkin in Xcentric’s malicious prosecution

action. We have jurisdiction pursuant to 28 U.S.C. § 1291

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4 XCENTRIC VENTURES V. BORODKIN

and review de novo. We agree with the district court that

Xcentric cannot prove an element of its malicious prosecution

claims, that the underlying claims were brought or continued

without factual or legal probable cause. We also deny

Borodkin’s motion for sanctions.

Xcentric claims that the underlying claims lacked factual

probable cause because defendants Mobrez and Llaneras lied

about phone conversations to support their underlying

extortion claim. Factual probable cause is lacking if the

litigant “relies upon facts which he has no reasonable cause

to believe to be true.” Sangster v. Paetkau, 80 Cal. Rptr. 2d

66, 74 (Ct. App. 1998). However, summary judgment is

proper if any undisputed facts, other than the fabricated

evidence, provide probable cause for the claim. Roberts v.

McAfee, Inc., 660 F.3d 1156, 1165 (9th Cir. 2011); Sangster,

80 Cal. Rptr. 2d at 75–77. The underlying complaint, first

amended complaint, and summary judgment orders establish

that all of the underlying claims in this case were supported

by other undisputed written statements. Therefore, any

dispute about whether Mobrez and Llaneras lied about the

phone conversations did not negate probable cause. See

Roberts, 660 F.3d at 1165; Sangster, 80 Cal. Rptr. 2d at

75–77.

For the same reason, Xcentric cannot state a plausible

claim that Borodkin continued the lawsuit without factual

probable cause after learning that her clients had lied about

the phone calls. The district court properly took judicial

notice of the underlying court documents. Sprewell v. Golden

State Warriors, 266 F.3d 979, 990 (9th Cir.), amended by

275 F.3d 1187 (9th Cir. 2001). Those documents establish

that Borodkin relied on written statements, not her clients’

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XCENTRIC VENTURES V. BORODKIN 5

original statements about the phone calls, when she continued

to pursue the claims in California.

Legal probable cause exists if “any reasonable attorney

would have thought the claim tenable” on the facts known to

him. Jarrow Formulas, Inc. v. LaMarche, 74 P.3d 737, 742

(Cal. 2003). Legal probable cause exists even if the claims

are “extremely unlikely” to win. Id. The standard is an

objective question of law to be decided by the court. 

Sangster, 80 Cal. Rptr. 2d at 75. We agree with the district

court that the claims asserted by Mobrez, Llaneras, and

Borodkin in California were tenable based on the facts

alleged in the underlying lawsuit.

The underlying attempted racketeering extortion claim

alleged that Xcentric attempted to extort money by

encouraging third parties to post negative reviews, 

manipulating the posts to highlight negative reviews and to

further highlight the negative reviews if the businesses posted

rebuttals, and then charging high fees to “turn the negative

into a positive.” The claim was tenable because a district

court had previously held that similar allegations stated an

extortion claim against Xcentric. Hy Cite Corp. v

badbusinessbureau.com, L.L.C., 418 F. Supp. 2d 1142,

1149–50 (D. Ariz. 2005) (holding that allegations that

Xcentric created and solicited false, defamatory complaints

against businesses and then charged $50,000 and monthly fee

of $1,500 to remove or stop posting the complaints stated an

extortion claim); Sheldon Appel Co. v. Albert & Oliker,

765 P.2d 498, 511–12 (Cal. 1989) (a claim is tenable if “at

least one prior California decision” with “somewhat

comparable” facts suggests available relief).

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6 XCENTRIC VENTURES V. BORODKIN

Nor were the racketeering or unfair competition claims

untenable because the business run by Mobrez and Llaneras,

Asia Economic Institute, lacked revenue. Mobrez and

Llaneras sufficiently alleged and proved the requisite injury

to business and property and economic loss, including that

they paid an expert to mitigate the damaging posts and lost

specific business opportunities and contracts because of the

negative posts. Diaz v. Gates, 420 F.3d 897, 900 (9th Cir.

2005) (en banc) (per curiam) (holding that injury to a

business or property interest includes harm that “amount[s] to

intentional interference with contract and interference with

prospective business relations”); Kwikset Corp. v. Superior

Ct., 246 P.3d 877, 884 (Cal. 2011) (requiring some sort of

lost money or property to establish actual economic loss for

unfair competition claims).

Xcentric alleged and argued that the remaining claims

lacked legal probable cause because it was immune for third

party posts pursuant to the Communications Decency Act. 

The fraud and unfair business practices claims alleged that

Xcentric manipulated and added content to the posts;

misrepresented its website as neutral, even though it

manipulated the postings to favor its program members; and

made other misrepresentations about the nature of its website. 

The claim was tenable because the Communications Decency

Act does not immunize Xcentric for the content it creates and

posts. Fair Housing Council v. Roommates.Com, LLC,

521 F.3d 1157, 1163 (9th Cir. 2008) (en banc). Moreover, at

the time of the underlying case, at least one district court in

California had indicated in dicta that the Communications

Decency Act does not immunize misrepresentations made by

a publisher about its publishing conduct. Levitt v. Yelp! Inc.,

Nos. 10-1321 & 10-2351, 2011 WL 5079526, at *9 (N.D.

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XCENTRIC VENTURES V. BORODKIN 7

Cal. Oct. 26, 2011) (dicta), aff’d on other grounds, 765 F.3d

1123 (9th Cir. 2014).

The remaining derivative claims asserted against Xcentric

were tenable because Xcentric was a necessary party if the

plaintiffs could obtain an order for the third parties to remove

the defamatory posts. Blockowicz v. Williams, 675 F. Supp.

2d 912, 915–16 (N.D. Ill. 2009) (refusing to order Xcentric to

remove defamatory postings, even though the plaintiffs had

obtained injunctive relief, because Xcentric was not a party

to the lawsuit).

Finally, the district court did not abuse its discretion when

it denied Xcentric’s requests to extend the case management

order deadline and to file a second amended complaint.

AFFIRMED.

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