Court Opinion

ID: 4588181
Source: CourtListenerOpinion
Date Created: 2020-11-19 23:01:59.947816+00
Date Added: 2024-06-11T13:50:43.739655
License: Public Domain

Filed 11/19/20 Valenzuela v. Perry CA2/8
   NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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has not been certified for publication or ordered published for purposes of rule 8.1115.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

                         SECOND APPELLATE DISTRICT

                                      DIVISION EIGHT

JACOB VALENZUELA,                                                   B302472

         Plaintiff and Appellant,                                  (Los Angeles County
                                                                   Super. Ct. No. 19CHCV00478)
         v.

JOHN A. PERRY et al.,

         Defendants and Respondents.

      APPEAL from an order of the Superior Court of
Los Angeles County. Stephen P. Pfahler, Judge. Affirmed.
      Pearson Law Corporation, Stephen W. Holohan and
Joyce J. Pearson for Plaintiff and Appellant.
      John A. Perry, in pro. per.; Law Offices of Robert E. Weiss
and John A. Perry for Defendants and Respondents.
                 _____________________________
       Jacob Valenzuela sued John Perry and Robert E. Weiss
Incorporated (collectively, Perry) for negligent performance of
contract and negligent misrepresentation in connection with
Perry’s settlement of a previous interpleader action. The
interpleader action sought to resolve competing claims by
Valenzuela and his siblings over the surplus proceeds from the
foreclosure sale of a property. Perry represented the foreclosure
trustee. Valenzuela alleged Perry failed to provide him notice of
the interpleader action, he never agreed to the settlement, and
Perry improperly disbursed his share of the surplus to others.
The trial court granted Perry’s special motion to strike under
Code of Civil Procedure section 425.16, 1 the anti-strategic lawsuit
against public participation (anti-SLAPP) statute. We affirm the
trial court’s order granting the anti-SLAPP motion.
                  PROCEDURAL BACKGROUND
       Barrett Daffin Frappier Treder & Weiss, LLP (the
foreclosure trustee) effected a foreclosure sale of a property in
Pacoima. The foreclosure sale resulted in a surplus of
$105,085.39, and Perry sent notice of the surplus on behalf of his
client to the titleholder of the property, Pedro Valenzuela,
Surviving Trustee of the Valenzuela Family Revocable Living
Trust Under Declaration of Trust Dated March 30, 1993.
       Attorney Bennett A. Rheingold responded, informing Perry
that Pedro2 was deceased and that Rheingold represented three

1    All further statutory references are to the Code of Civil
Procedure unless otherwise indicated.
2    For ease of reference, we will refer to the members of the
Valenzuela family by their first names.

                                 2
of Pedro’s heirs with claims to the surplus: Sarah Valenzuela,
John Valenzuela, and Christina Valenzuela. A fourth heir,
Vincent Valenzuela, was not represented by Rheingold but also
claimed a share of the surplus. Perry filed an interpleader action
on behalf of the foreclosure trustee seeking resolution of the
competing claims. The defendants named in the interpleader
action were the four heirs then known to Perry: Sarah, John,
Christina, and Vincent. After Rheingold negotiated a settlement
between his clients and Vincent, Perry drafted a settlement
agreement for their review.
       Rheingold then informed Perry of the existence of a fifth
heir, Valenzuela. Rheingold advised Perry he represented
Valenzuela, and the four other heirs had agreed to redistribute
the surplus to accommodate the new claim. Perry revised the
settlement agreement to include Valenzuela but misidentified
Valenzuela as a named defendant in the interpleader action
when he was not. Perry later explained it was a typographical
error, which the trial court credited. Perry signed the agreement
on behalf of his client and approved it “as to form and content.”
After Perry received the settlement agreement with signatures
from all parties, including Valenzuela, he disbursed the surplus
proceeds, issuing checks to Rheingold’s client trust account and to
Vincent. He then dismissed the interpleader action.
       On June 11, 2019, Valenzuela filed suit against Sarah,
Rheingold, Perry, and others.3 He alleged he did not know about

3     Valenzuela also named Arturo Olivas and PCC Real Estate
Solutions, Inc. as defendants. He alleged they were retained by
Rheingold to distribute the proceeds of the settlement agreement.
They are not parties to this appeal.

                                3
the interpleader action, he did not authorize the settlement, and
his signature on the settlement agreement was a forgery. He
further alleged his portion of the surplus was improperly given to
Sarah by Rheingold and he did not receive any of the surplus
funds.
       Valenzuela alleged causes of action against Perry for
negligent performance of contract and negligent
misrepresentation. As to the negligent performance of contract
claim, Valenzuela alleged Perry failed to provide notice of the
interpleader action to Valenzuela, failed to ensure the heirs each
filed formal claims, and failed to ensure Valenzuela was actually
represented by Rheingold. As to the negligent misrepresentation
cause of action, Valenzuela alleged Perry misrepresented that he
was a named defendant in the interpleader action when he was
not.
       Perry filed a special motion to strike the allegations against
him pursuant to the anti-SLAPP statute. The trial court granted
Perry’s motion in a six-page, single-spaced order. The court
found Valenzuela’s claims against Perry arose from protected
activity and Valenzuela failed to demonstrate a probability of
prevailing on his claims as required by section 425.16,
subdivision (b). Valenzuela appealed.
                           DISCUSSION
       Valenzuela’s appeal rests on his assertion that Perry failed
to provide him notice of the interpleader action, thus depriving
him of the opportunity to be heard in the litigation and to
participate in the settlement. According to Valenzuela, this lack
of notice violates his due process rights, which renders the anti-
SLAPP statute invalid and inapplicable to his claims against
Perry. Additionally, the lack of notice, coupled with the false

                                 4
statement that Valenzuela was a named defendant, constituted
extrinsic fraud, which is an exception to the litigation privilege
that would otherwise insulate Perry from liability.
       In his briefing, Valenzuela ignores the traditional two-step
anti-SLAPP analysis. We decline to follow his lead and employ
the two-step analysis to affirm the trial court’s anti-SLAPP order.
We first address Valenzuela’s due process argument, however, to
determine whether the anti-SLAPP statute is valid and applies to
this case.
I.     The Anti-SLAPP Statute Is Valid and Applies to This
       Case
       Valenzuela argues Perry violated his due process rights
under the federal and state Constitutions when he failed to serve
the summons and complaint on Valenzuela, and thereafter failed
to provide notice of the litigation to him and give him the
opportunity to participate in it. Although he conflates the
arguments in confusing ways, we understand Valenzuela to make
two separate arguments based on his due process claim: (1) the
anti-SLAPP statute is invalidated because it conflicts with
constitutional due process, and (2) the anti-SLAPP statute is
inapplicable to the claims against Perry. We find neither
argument convincing.
       Valenzuela has presented no authority for the first
argument that the anti-SLAPP statute is invalid. He merely
cites to Monster, LLC v. Superior Court (2017) 12 Cal. App. 5th
1214, 1231, which sets forth the general proposition that a
statute is invalid to the extent it conflicts with the Constitution.
The Supreme Court, however, has not invalidated the anti-
SLAPP statute on constitutional grounds. Instead, it “considered
and rejected the suggestion that the anti-SLAPP statute unduly

                                 5
burdens plaintiffs’ access to courts.” (Jarrow Formulas, Inc. v.
LaMarche (2003) 31 Cal. 4th 728, 740, fn. 8.)
       Valenzuela also argues the violation of his due process
rights constitutes an exception to the anti-SLAPP statute, relying
on Flatley v. Mauro (2006) 39 Cal. 4th 299, 320 (Flatley) and
Fremont Reorganizing Corp. v. Faigin (2011) 198 Cal. App. 4th
1153, 1169. Those cases hold criminal conduct that is conceded
by the defendant or conclusively established by the evidence is
not protected under the anti-SLAPP statute. We decline to
extrapolate the criminal conduct exception from these cases to
create a new exception for alleged due process violations that are
not conceded or conclusively established.
       As we set out below, there is no factual or legal support for
the argument that Valenzuela’s due process rights were violated
in this case. The record shows Perry relied in good faith on
Rheinhold’s assurance he represented Valenzuela. Additionally,
the foreclosure statute does not require Perry to serve Valenzuela
with the summons and complaint in the interpleader action or
otherwise provide notice to a potential claimant who is ostensibly
represented by an attorney.
II.    The Anti-SLAPP Motion Was Properly Granted
       Having rejected Valenzuela’s challenge to the validity of
the anti-SLAPP statute and its application to this case, we now
consider whether Perry’s motion was properly granted. We find
it was.
       A. The Anti-SLAPP Statute
       “In evaluating an anti-SLAPP motion, the trial court first
determines whether the defendant has made a threshold showing
that the challenged cause of action arises from protected activity.
[Citation.]” (Rusheen v. Cohen (2006) 37 Cal. 4th 1048, 1056

                                 6
(Rusheen).) “It is well established that the protection of the anti-
SLAPP statute extends to lawyers and law firms engaged in
litigation-related activity.” (Optional Capital, Inc. v. Akin Gump
Strauss, Hauer & Feld LLP (2017) 18 Cal. App. 5th 95, 113.)
Section 425.16, subdivision (e)(2), in particular, protects “any
written or oral statement or writing made in connection with an
issue under consideration or review by a . . . judicial body, or any
other official proceeding authorized by law . . . .” (§ 425.16, subd.
(e)(2).) “A defendant’s burden on the first prong is not an onerous
one. A defendant need only make a prima facie showing that the
plaintiff’s claims arise from the defendant’s constitutionally
protected free speech or petition rights. [Citation.]” (Optional
Capital, Inc., supra, at p. 112.)
       “If the court finds the defendant has made the threshold
showing, it determines then whether the plaintiff has
demonstrated a probability of prevailing on the claim.
[Citation.]” (Rusheen, supra, 37 Cal.4th at p. 1056.) To show a
probability of prevailing, the opposing party must demonstrate
the claim is legally sufficient and supported by a sufficient prima
facie showing of evidence to sustain a favorable judgment if the
evidence it has submitted is credited. (Zamos v. Stroud (2004)
32 Cal. 4th 958, 965.)
       We review a trial court’s determination of an anti-SLAPP
motion de novo. (Park v. Board of Trustees of California State
University (2017) 2 Cal. 5th 1057, 1067.) “ ‘An anti-SLAPP
motion is an evidentiary motion.’ [Citation.] Consequently, ‘[t]he
prima facie showing of merit must be made with evidence that is
admissible at trial. [Citation.] Unverified allegations in the
pleadings or averments made on information and belief cannot
make the showing. [Citations.]’ ” (Contreras v. Dowling (2016)

                                  7
5 Cal. App. 5th 394, 405 (Contreras).) Thus, “ ‘we neither “weigh
credibility [nor] compare the weight of the evidence.
Rather, . . . [we] accept as true the evidence favorable to the
plaintiff [citation] and evaluate the defendant’s evidence only to
determine if it has defeated that submitted by the plaintiff as a
matter of law.” [Citations.]’ ” (Flatley, supra, 39 Cal.4th at
pp. 325–326.)
       B Vasquez’s Claims Against Perry Arose From
       Protected Activity
       Vasquez does not dispute his claims against Perry arose
entirely from the interpleader action and its settlement. As to
his negligent performance of contract claim, Valenzuela alleged
Perry had “a duty to use such skill, prudence, and diligence as a
member of the legal profession commonly possesses and exercises
in providing the legal services relating to drafting, signing, and
enforcement of the Settlement Agreement at all times alleged in
the complaint.” Valenzuela further alleged as to the negligent
misrepresentation claim that Perry “misrepresented in the
Settlement Agreement that Plaintiff was named as a defendant
in the Interpleader action and a party to the Settlement
Agreement.” “The statement in the Settlement Agreement that
Plaintiff was a defendant in the Interpleader action was not true.
The statement was made without reasonable ground for belief
that it was true.”
       It is clear the misrepresentation and conduct complained of
were “made in connection with an issue under consideration or
review by a . . . judicial body, or any other official proceeding
authorized by law . . . .” (§ 425.16, subd. (e)(2); Seltzer v. Barnes
(2010) 182 Cal. App. 4th 953, 963 [“settlement negotiations are an
exercise of the right to petition and statements made as part of

                                  8
such negotiations are in connection with the underlying lawsuit
for purposes of section 425.16, subdivision (e)(2)”]; GeneThera,
Inc. v. Troy & Gould Professional Corp. (2009) 171 Cal. App. 4th
901, 907.)
       Valenzuela relies on Perry’s misstatement in the
settlement agreement about Valenzuela’s status as a defendant
to argue Perry’s conduct was not protected activity because it was
fraudulent. However, a finding of protected activity arises “even
against allegations of fraudulent promises made during the
settlement process.” (Suarez v. Trigg Laboratories, Inc. (2016)
3 Cal. App. 5th 118, 123.)
       C. Valenzuela Failed to Demonstrate a Probability of
       Prevailing
       We now consider whether Valenzuela demonstrates a
probability of prevailing on his claims against Perry. Valenzuela
cannot meet this burden because the litigation privilege is an
absolute defense to his claims and, in any event, Valenzuela has
failed to state a claim against Perry for negligent performance of
contract and negligent misrepresentation.
       1. The Litigation Privilege Bars Valenzuela’s Claims
          Against Perry
       “The litigation privilege is . . . relevant to the second step in
the anti-SLAPP analysis in that it may present a substantive
defense a plaintiff must overcome to demonstrate a probability of
prevailing. [Citations.]” (Flatley, supra, 39 Cal.4th at p. 323.)
The principal purpose of the litigation privilege, set forth in Civil
Code section 47, is to afford litigants, attorneys, and witnesses
the utmost freedom of access to the courts without fear of being
harassed later by derivative tort actions. (Silberg v. Anderson
(1990) 50 Cal. 3d 205, 213 (Silberg).) Thus, it is applied broadly to

                                   9
all tort actions except malicious prosecution claims. (Ibid.) The
litigation 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.” (Id. at p. 212.) Whether a plaintiff has made a prima
facie showing of his ability to overcome the litigation privilege is
“a factual question that will require evaluation of plaintiffs’
proffered evidence . . . .” (Birkner v. Lam (2007) 156 Cal. App. 4th
275, 286.)
       The litigation privilege applies here because Valenzuela’s
claims against Perry involve communications made in a judicial
proceeding (the interpleader action) by a participant authorized
by law (attorney Perry) to achieve the object of the litigation
(to resolve the heirs’ competing claims) that is logically related to
the action. Also, Valenzuela does not assert a malicious
prosecution cause of action against Perry.
       Valenzuela argues the litigation privilege does not apply
due to extrinsic fraud, which the Supreme Court has indicated is
an exception to the privilege.4 (Silberg, supra, 50 Cal.3d at
p. 212.) Valenzuela claims the lack of notice constitutes extrinsic

4      Valenzuela also contends the litigation privilege statute is
invalid because it conflicts with the Constitution, citing to
Jacob B. v. County of Shasta (2007) 40 Cal. 4th 948, 961. Jacob B.
does not support Valenzuela’s claim. It instead held “the
litigation privilege applies even to a constitutionally based
privacy cause of action.” (Ibid.) We reject this argument for the
same reason we rejected it as to the anti-SLAPP statute;
Valenzuela has provided no authority for this proposition.

                                 10
fraud. (Kuehn v. Kuehn (2000) 85 Cal. App. 4th 824, 832.)
According to Valenzuela, Perry did not serve him with notice of
the interpleader action. Instead, Perry falsely identified
Valenzuela as a defendant in the settlement agreement who had
notice of the interpleader action and an opportunity to participate
in it.
       Even assuming the misstatement in the settlement
agreement amounts to fraud, rather than a typographical error,
the litigation privilege still applies.5 In Rusheen, supra,
37 Cal.4th at page 1058, the cross-complainant alleged the
attorney cross-defendant obtained a default judgment against
him in a previous action by filing a false declaration of service of
process. According to the cross-complainant, he was never served
with the summons or complaint in the previous action. The
Supreme Court held the communicative act of filing an allegedly
false declaration of service of process fell within the litigation
privilege. (Ibid.; see Navellier v. Sletten (2002) 29 Cal. 4th 82, 90
[the litigation privilege applies to allegations of fraud in
connection with a settlement].) We follow Rusheen to apply the
litigation privilege here.

5     At oral argument, Valenzuela asserted Rheingold’s
signature block in the settlement agreement showed he only
represented Sarah, John, and Christina, not Valenzuela.
Valenzuela argued, for the first time, that this was further
evidence of extrinsic fraud and urged us to disregard Perry’s
declaration. Even if we ignore the long-established procedural
rule that issues first raised at oral argument are forfeited
(Collins v. Navistar, Inc. (2013) 214 Cal. App. 4th 1486, 1508), this
purported fraud does not change our analysis.

                                11
       We further decline to credit Valenzuela’s claim because he
failed to proffer any admissible evidence of extrinsic fraud.
(Contreras, supra, 5 Cal.App.5th at p. 405.) Valenzuela’s causes
of action against Perry sound in negligence rather than fraud,
and he failed to submit any declarations or other evidence to
oppose the anti-SLAPP motion. The evidence in the record
demonstrates that at the time the interpleader action was filed,
Perry did not know Valenzuela had a claim to the surplus. When
he was alerted to Valenzuela’s existence, Perry relied in good
faith upon Rheingold’s assurance that he represented Valenzuela
and that Valenzuela signed the settlement agreement.
Valenzuela provides no evidence to the contrary.
       Moreover, the law does not require a foreclosure trustee
search for or investigate potential claimants to a surplus to
provide them notice.6 Civil Code section 2924j, subdivision (a)
specifies notice of any surplus from a foreclosure sale must be
made “to all persons with recorded interests in the real property
as of the date immediately prior to the trustee’s sale who would
be entitled to notice pursuant to subdivisions (b) and (c) of [Civil
Code] [s]ection 2924b.”7 “ ‘[A] trustee owes no duty to provide

6      We question whether Perry is the proper defendant in this
matter because the law imposes duties on the foreclosure trustee,
not its attorney, in connection with a foreclosure sale and
disbursement of surplus proceeds. However, Perry does not
assert this as a basis to affirm the trial court’s anti-SLAPP order.
7      Subdivisions (b) and (c) of section 2924b of the Civil Code
“ ‘specify those persons to whom a trustee must mail a default
notice. First, section 2924b, subdivision (b)[,] requires a trustee
to give notice to (1) the trustor or mortgagor at his or her last
known address if different than the address specified in the deed

                                 12
notices to any person unless the trust deed or the statute
specifically provides for such notice.’ ” (Banc of America, supra,
180 Cal.App.4th at p. 1097; I. E. Associates v. Safeco Title Ins. Co.
(1985) 39 Cal. 3d 281, 288–289 [foreclosure trustee was not
required to conduct a search for the trustor’s current address
where the trustor had failed to notify the trustee it had moved];
Cal–Western Reconveyance Corp. v. Reed (2007) 152 Cal. App. 4th
1308, 1322–1323, [trustor’s former attorney not entitled to notice
under Civil Code section 2924j despite having filed notice of fee
lien against trustor’s eventual surplus recovery because the
lawyer was not a party to the action and “not among those
persons ‘with recorded interests’ ” immediately prior to trustee’s
sale].)

of trust, and (2) to those persons who had recorded a statutory
request for notice. Second, section 2924b, subdivision (c)[,]
requires a trustee to give notice to several categories of parties,
including “the successor in interest, as of the recording date of
the notice of default, of the . . . interest . . . being foreclosed.”
Section 2924b, subdivision (c)(1) requires this additional notice,
however, only if the party acquired the interest “by an
instrument sufficient to impart constructive notice of
the . . . interest in the land . . . and provided the instrument is
recorded in the office of the county recorder so as to impart that
constructive notice prior to the recording date of the notice of
default and provided the instrument as so recorded sets forth a
mailing address which the county recorder shall use, as
instructed within the instrument, for the return of the
instrument after recording . . . .” ’ [Citation.]” (Banc of America
Leasing & Capital, LLC v. 3 Arch Trustee Services, Inc. (2009)
180 Cal. App. 4th 1090, 1097–1098 (Banc of America).)

                                  13
       Valenzuela presented no evidence he had a recorded
interest in Pedro’s property prior to the trustee’s sale to entitle
him to notice under Civil Code section 2924j. Nor does he provide
any evidence the trust deed requires such notice. Instead, the
record shows Perry properly provided notice to Pedro, the trustor,
as required by Civil Code section 2924j, subdivision (a). Then,
Perry provided notice to Valenzuela through Rheingold, whom
Perry believed to be Valenzuela’s attorney, of the settlement.
Having failed to proffer any evidence to support his claim of
extrinsic fraud, Valenzuela’s claims against Perry are barred by
the litigation privilege.
       2. Valenzuela Has Failed to State a Claim for
          Negligent Performance on Contract or Negligent
          Misrepresentation
       Perry asserts Valenzuela has not stated a cause of action
against Perry and thus has failed to demonstrate a probability of
prevailing on this basis. Valenzuela does not address this issue.
We may consider this issue waived by Valenzuela. (In re
Marriage of McLaughlin (2000) 82 Cal. App. 4th 327, 337.)
       In any case, Valenzuela has not shown a probability of
prevailing on the merits as to his causes of action against Perry.
To prevail on claims for negligent performance of contract and
negligent misrepresentation, Valenzuela must show Perry owed
him a duty of care. (North American Chemical Co. v. Superior
Court (1997) 59 Cal. App. 4th 764, 775 [negligent performance of
contract arises from a breach of duty growing out of the contract];
Eddy v. Sharp (1988) 199 Cal. App. 3d 858, 864 [“As is true of
negligence, responsibility for negligent misrepresentation rests
upon the existence of a legal duty, imposed by contract, statute or
otherwise, owed by a defendant to the injured person.”].)

                                14
The only duty Valenzuela identifies on appeal is Perry’s
purported duty to serve him with notice of the interpleader
action. As discussed above, he offers no factual or legal basis for
the proposition that Perry owed him this duty.
                          DISPOSITION
      The order granting Perry’s anti-SLAPP motion is affirmed.
Perry to recover his costs on appeal.

                                     BIGELOW, P. J.
We concur:

             STRATTON, J.

             WILEY, J.

                                15