Court Opinion

ID: 1085389
Source: CourtListenerOpinion
Date Created: 2013-10-15 23:28:35.868353+00
Date Added: 2024-06-11T12:52:30.395820
License: Public Domain

Filed 10/15/13 Catanzarite Law Corp. v. Gordon Reese CA4/3

                      NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication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

                                     FOURTH APPELLATE DISTRICT

                                                DIVISION THREE

CATANZARITE LAW CORPORATION,

     Plaintiff and Appellant,                                          G047968

         v.                                                            (Super. Ct. No. 30-2012-00578759)

GORDON REESE, LLP,                                                     OPINION

     Defendant and Respondent.

                   Appeal from an order of the Superior Court of Orange County, Thierry
Patrick Colaw, Judge. Affirmed in part, reversed in part.
                   Catanzarite Law Corporation, Kenneth J. Catanzarite and Eric V. Anderton,
for Plaintiff and Appellant.
                   Gordon & Rees, Douglas Smith and Michael P. Campbell, for Defendant
and Respondent.
                                         INTRODUCTION
              This is an appeal from an order granting an anti-SLAPP motion to
respondent law firm, Gordon & Rees, LLP. Appellant Catanzarite Law Corporation sued
Gordon & Rees, among others, for interference with contractual relations after former
Catanzarite clients did not honor a contingency fee agreement. Gordon & Rees
represented parties opposed to these former clients in a series of Los Angeles Superior
Court lawsuits. Gordon & Rees’s clients settled with Catanzarite’s former clients, and,
apparently, Catanzarite did not get paid.
              Gordon & Rees moved to dismiss the lawsuit under the anti-SLAPP statute,
Code of Civil Procedure section 425.16,1 a motion the trial court granted. The court also
awarded Gordon & Rees its attorney fees, pursuant to section 425.16, subdivision (c)(1).
              We affirm the order granting the motion. The activity of which Catanzarite
complains is clearly protected under the anti-SLAPP statute and privileged under Civil
Code section 47. The attorney fee award, however, must be reversed. Gordon & Rees
represented itself in the motion proceedings, and a self-represented party cannot recover
attorney fees in this context.

                                                  FACTS
              In July 2011, Catanzarite substituted into five actions pending in Los
Angeles Superior Court, representing a group of clients that included Ronald Weinstock.
Catanzarite alleged it had a written fee agreement with these clients providing that the
firm would be paid on contingency. Its compensation was to include membership
interests in Newlife Sciences, LLC, at that point in the (allegedly wrongful) possession of

       1      All further statutory references are to the Code of Civil Procedure unless otherwise indicated.

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some of the adverse parties.2 Catanzarite also alleged it had a lien on any recovery in the
five Weinstock actions.
                 The Weinstock actions included malpractice claims against two attorneys,
John Markham and Elizabeth Read, and their law firm, Markham & Read. Gordon &
Rees represented the Markham/Read parties.
                 In February 2012, Catanzarite moved to withdraw from representing the
Weinstock parties, and the trial court granted the motion. Catanzarite alleged that a
Gordon & Rees lawyer was told about the attorney lien at that time. The Weinstock
parties hired another law firm to represent them.
                 The Weinstock parties settled with Markham, Read, and their law firm in
April 2012. According to the complaint, Weinstock received money and membership
interests in Newlife Sciences as consideration for settling. The Weinstock parties then
dismissed Markham, Read, and their law firm.
                 Catanzarite sued Gordon & Rees (among others) for interfering with its
contract with the Weinstock parties and the recovery on the lien. Gordon & Rees filed an
anti-SLAPP motion, which the trial court granted, in addition awarding Gordon & Rees
$3,842 in attorney fees. The trial court dismissed Gordon & Rees from the interference
action.

                                                DISCUSSION
                 The California Legislature enacted the anti-SLAPP statute to counteract “a
disturbing increase in lawsuits brought primarily to chill the valid exercise of the
constitutional rights of freedom of speech and petition for the redress of grievances.”

          2        Catanzarite did not attach a copy of the fee agreement to its complaint and did not set out the
relevant passages in haec verba. (See 4 Witkin, Cal. Procedure (5th ed. 2008) Pleading, § 518, p. 650.) The
agreement was also not an exhibit to the opposition to respondent’s anti-SLAPP motion. Thus, it is not possible to
tell what the agreement actually provided with respect to payment for legal services or whether the agreement was
enforceable under Business and Professions Code section 6147.

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(§ 425.16, subd. (a).) The Legislature created a special motion to strike, filed at the
outset of litigation, to nip these suits in the bud, before defendants incurred crippling
attorney fees and other expenses. (Equilon Enterprises v. Consumer Cause, Inc. (2002)
29 Cal. 4th 53, 65.) A court may order a cause of action “arising from any act . . . in
furtherance of the . . . right of petition or free speech under the United States Constitution
or the California Constitution in connection with a public issue” to be stricken by means
of this special motion. (§ 425.16, subd. (b)(1).) We review the order granting or denying
an anti-SLAPP motion de novo. (Flatley v. Mauro (2006) 39 Cal. 4th 299, 325.)
              The trial court uses a two-part test to evaluate an anti-SLAPP motion.
First, the court determines whether the complaint or cause of action is “one arising from
protected activity.” (Navellier v. Sletten (2002) 29 Cal. 4th 82, 88.) As our Supreme
Court has emphasized, “[T]he critical consideration is whether the cause of action is
based on the defendant’s protected free speech or petitioning activity.” (Id. at p. 89.)
The court has also cautioned, “[T]he mere fact an action was filed after protected activity
took place does not mean it arose from that activity.” (City of Cotati v. Cashman (2002)
29 Cal. 4th 69, 76-77.) A cause of action “arising from” protected activity “means simply
that the defendant’s act underlying the plaintiff’s cause of action must itself have been an
act in furtherance of the right of petition or free speech.” (Id. at p. 78.)
              The defendant bears the burden of showing that the cause of action arises
from protected activity. (Equilon Enterprises v. Consumer Cause, Inc., supra, 29 Cal.4th
at p. 67.) If the defendant makes that showing, the court then proceeds to the second part
of the inquiry: whether it is probable that the plaintiff will prevail on the claim. The
plaintiff need not prove its claim, but it must produce enough evidence to establish a
prima facie case. (Rusheen v. Cohen (2006) 37 Cal. 4th 1048, 1056.)

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I.               Protected Activity
                 The actions of which Catanzarite complains took place during and
immediately after settlement negotiations in a set of ongoing lawsuits in Los Angeles
Superior Court. Gordon & Rees was not a party to these proceedings. Instead, it
represented one set of parties who were adverse to Catanzarite’s former clients. Gordon
& Rees’s personal right to petition the courts for redress is therefore not at issue.
Nevertheless, the anti-SLAPP statute covers attorneys who are being sued because of
statements “‘made in connection with an issue under consideration or review by a . . .
judicial body’ within the meaning of section 425.16, subdivision (e)(2).’” (Dowling v.
Zimmerman (2001) 85 Cal. App. 4th 1400, 1420; see also Rusheen v. Cohen, supra,
37 Cal.4th at p. 1056 [section 425.16 applies to “qualifying acts committed by attorneys
in representing clients in litigation”].) “[I]f the plaintiff is a nonclient who alleges causes
of action against someone else’s lawyer based on that lawyer’s representation of other
parties, the anti-SLAPP statute is applicable to bar such nonmeritorious claims.”
(Thayer v. Kabateck Brown Kellner LLP (2012) 207 Cal. App. 4th 141, 158.)
                 Catanzarite argues that the conduct at issue is paying the settlement
proceeds to the Weinstock parties, which is not protected activity, rather than
participating in the settlement negotiations. This argument will be dealt with in more
detail below. Here we simply point out that Catanzarite presented no evidence that
Gordon & Rees paid the Weinstock parties anything.3 On the contrary, the only evidence
on this issue was the declaration of a Gordon & Rees lawyer involved in the Weinstock
litigation that the firm never possessed or controlled the consideration for the settlement

         3         Catanzarite asks us to “assum[e] true all of Appellant’s allegations.” We do not assume the
allegations are true, as we would on demurrer. The plaintiff opposing an anti-SLAPP motion must present
competent, admissible evidence; it may not rely solely on the allegations of the complaint. (Paiva v. Nichols (2008)
168 Cal. App. 4th 1007, 1017.)

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agreement. In short, Catanzarite presented no evidence that Gordon & Rees had any
involvement in the settlement other than as attorneys representing one of the opposing
sides.
              Representing clients in settlement negotiations clearly qualifies as protected
activity for anti-SLAPP purposes. (See, e.g., Thayer v. Kabateck Brown Kellner LLP,
supra, 207 Cal.App.4th at p. 154 [“[L]egal advice and settlement made in connection
with litigation are within section 425.16 . . .”]; Dowling v. Zimmerman, supra,
85 Cal.App.4th at p. 1420.) We conclude Gordon & Rees presented sufficient evidence
to move the analysis to the second prong.
II.           Probability of Prevailing
              Catanzarite alleged a single cause of action for interference with contractual
relations. The elements of a cause of action for interference with contractual relations are
“‘(1) a valid contract between plaintiff and a third party; (2) defendant’s knowledge of
this contract; (3) defendant’s intentional acts designed to induce a breach or disruption of
the contractual relationship; (4) actual breach or disruption of the contractual
relationship; and (5) resulting damage.’ [Citation.]” (Quelimane Co. v. Stewart Title
Guaranty Co. (1998) 19 Cal. 4th 26, 55.)
              Catanzarite misapprehends the conduct that would support a cause of action
for interference with contractual relations. It argued below and argues here that the
settlement negotiation itself was irrelevant; the wrongful act was paying money to the
Weinstock parties and transferring to them membership interests in Newlife Sciences,
from which Catanzarite evidently expected to be paid. But if the contract between
Catanzarite and the Weinstock parties was breached, it was not breached when the latter

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obtained the settlement proceeds; it was breached when they did not pay Catanzarite.4
                  What Catanzarite needed to establish probability of prevailing on an
interference with contract claim was evidence to create a prima facie case that Gordon &
Rees somehow convinced or persuaded the Weinstock parties (whom Gordon & Rees did
not represent) not to pay Catanzarite pursuant to the fee agreement. Catanzarite
presented no such evidence. As stated above, the evidence before the trial court
regarding respondent law firm’s involvement in the settlement established only that
Gordon & Rees represented its clients in their negotiations with Catanzarite’s former
clients.
                  The trial court found in Gordon & Rees’s favor on the second prong
because any statements made during settlement negotiations were absolutely privileged
under Civil Code section 47, subdivision (b)(2).5 We agree. “‘[T]he privilege is now
held applicable to any communication, whether or not it amounts to a publication
[citations], and all torts except malicious prosecution. [Citations.] Further, it applies to
any publication required or permitted by law in the course of a judicial proceeding to
achieve the objects of the litigation, even though the publication is made outside the
courtroom and no function of the court or its officers is involved. [Citations.] [¶] The
usual formulation is that the 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. [Citations.]’ [Citation.] Thus, ‘communications with “some
relation” to judicial proceedings’ are ‘absolutely immune from tort liability’ by the
litigation privilege [citation]. It is not limited to statements made during a trial or other

         4          Catanzarite’s barking up the wrong tree is exemplified by this statement from its opening brief:
“[T]he cause of action arises not from the settlement agreement itself but from the fact that money was paid to
Weinstock resulting in a breach of Appellant’s lien contract with Weinstock.” Catanzarite does not explain how
paying money to Weinstock caused a breach of the fee agreement.
         5          Civil Code section 47 provides in pertinent part: “A privileged publication is one made: [¶] . . .
[¶] (b) In any . . . (2) judicial proceeding. . . .”

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proceedings, but may extend to steps taken prior thereto, or afterwards.” (Rusheen v.
Cohen, supra, 37 Cal.4th at p. 1057.) Settlement discussions in ongoing litigation qualify

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for the absolute immunity of the privilege. (See Genethera, Inc. v. Troy & Gould
Professional Corp. (2009) 171 Cal. App. 4th 901, 909-910 [settlement letter directed to
counsel privileged].)
                  We have found one case in which an attorney recovered for interference
with contract when opposing counsel helped to persuade the attorney’s client not to pay
him: Skelly v. Richman (1970) 10 Cal. App. 3d 844. The opinion does not mention the
litigation privilege, perhaps because most of the machinations took place after the
underlying case was over. If Skelly stands for the proposition that an attorney can be
sued for statements made during settlement discussions, we decline to follow it. We do
not believe its analysis survives subsequent California Supreme Court pronouncements
concerning the scope of the litigation privilege. (See, e.g., Rusheen v. Cohen, supra, 37
Cal.4th at pp. 1057-1058; Rubin v. Green (1993) 4 Cal. 4th 1187, 1193; Silberg v.
Anderson (1990) 50 Cal. 3d 205, 212.)

III.              Attorney Fees6
                  Section 425.16, subdivision (c)(1), permits a defendant prevailing in an
anti-SLAPP motion to recover attorney fees and costs. Gordon & Rees, however,
represented itself in the motion proceeding. “[A] party, whether or not he is an attorney,
who is not represented by counsel and who litigates an anti-SLAPP motion on his own
behalf may not recover attorney fees under the statute.” (Taheri Law Group v. Evans
(2008) 160 Cal. App. 4th 482, 494; see also Ramona Unified School Dist. v. Tsiknas
(2005) 135 Cal. App. 4th 510, 524.) As Gordon & Rees litigated the motion on its own
behalf, it was not entitled to a fee award.

        6       Gordon & Rees has correctly argued that Catanzarite failed to raise this objection in the trial court.
Whether Gordon & Rees is entitled to fees is a pure question of law, which we may address for the first time on
appeal. (See San Mateo Union High School Dist. v. County of San Mateo (2013) 213 Cal. App. 4th 418, 436.)

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                                      DISPOSITION
              The portion of the order granting attorney fees is reversed. In all other
respects, the order is affirmed. Respondent is to recover its costs on appeal.

                                                 BEDSWORTH, ACTING P. J.

WE CONCUR:

MOORE, J.

THOMPSON, J.

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