Filed 6/16/14 Tabas v. Boshes CA2/7
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION SEVEN
JOEL TABAS, as Trustee in Bankruptcy, B247374
Plaintiff and Respondent, (Los Angeles County
Super. Ct. No. SC116169)
v.
RALPH BOSHES,
Defendant and Appellant.
APPEAL from an order of the Superior Court of Los Angeles County, Gerald
Rosenberg, Judge. Reversed and remanded.
Nemecek & Cole, Jonathan B. Cole, Mark Schaeffer and David B. Owen, for
Defendant and Appellant.
Law Offices of Randall Rich and Randall Rich, for Plaintiff and Respondent, Joel
Tabas, trustee of the bankruptcy of Raul Serrano.
_________________
Ralph Boshes appeals from an order denying his special motion to strike pursuant
1
to Code of Civil Procedure section 425.16 the first cause of action for fraud in a
complaint filed by Joel Tabas, Trustee of the Bankruptcy Estate of Raul Serrano, which
also alleged causes of action against Boshes for professional negligence and breach of
fiduciary duty. We agree with the trial court Tabas’s fraud claim arises at least in part
from Boshes’s protected speech or petitioning activity within the meaning of section
425.16—letters written by Tabas to the Contractor’s State Licensing Board (CSLB) on
behalf of his client Serrano Const—but disagree Tabas established a reasonable
probability of prevailing on that claim. Accordingly, we reverse.
FACTUAL AND PROCEDURAL BACKGROUND
On March 2, 2012 Tabas, the trustee of Serrano’s bankruptcy estate, filed a
complaint and on October 16, 2012 a first amended complaint against attorney Boshes
and 20 Doe defendants asserting claims for fraud, professional negligence and breach of
fiduciary duty. According to the operative first amended complaint Serrano obtained a
California contractor license (No. 409333) in 1981 as a sole proprietor under the name
Serrano Construction. In November 1988 Jorge Barajas applied to the CSLB for a
contractor license in the name of JB Construction. The application was thereafter revised
to request a partnership license in the name of Serrano Const with Barajas and Serrano
named in the revised application as partners and Serrano identified as the qualifying
partner. Contractor license 571998 was issued to Serrano Const, a general partnership.
Tabas alleged Serrano was not aware of, and did not consent to, the application for the
partnership license. The pleading alleged Boshes aided Barajas in obtaining the license
and thereafter assisted in filing biannual renewals for the Serrano Const license with the
CSLB from 1991 through 2009 without Serrano’s consent.
The first amended complaint further alleged Barajas obtained an individual
California contractor license in 1996. In March 1998 Barajas submitted an application to
1
Statutory references are to the Code of Civil Procedure unless otherwise indicated.
2
the CSLB to change the qualifying partner for license number 571998 from Serrano to
Barajas. On May 15, 1998 the CSLB returned the application to Barajas requesting
additional documentation to effect the change requested. In part the letter stated, “If Raul
Domingo Serrano is disassociating from this partnership he must complete a Notice of
Disassociation. This license will then be automatically cancelled. [¶] If Jorge Barajas is
replacing him only as the qualifier on this license, a letter must be submitted stating he
will remain on the license as the general partner.”
On July 30, 1998 and August 14, 1998 Boshes wrote the CSLB, advising it that
Serrano would remain a general partner in Serrano Const, that Barajas and Serrano had
reconstituted their partnership and that earnings and profits from January 1, 1998 on
would be distributed 30 percent to Serrano and 70 percent to Barajas. On August 19,
1998 the CSLB sent Serrano Const a letter accepting the application to change the
qualifying partner for license number 571998 from Serrano to Barajas. Tabas alleged
Serrano had no knowledge of these communications between Boshes and the CSLB and
neither authorized nor consented to Boshes’s purported representation of him. Rather,
the two letters, which contained knowingly false information, were created by Boshes as
part of a fraudulent scheme to allow Barajas to continue contracting under license
number 571998 notwithstanding the fact that Serrano had retired and was no longer
living in California.
On September 25, 2006 John Brandon entered into a home improvement contract
with Serrano Const, signed by Barajas. On November 6, 2007 Boshes filed a complaint
for breach of contract on behalf of Barajas, “individually and dba Serrano Construction,”
against Brandon. On December 28, 2007 Brandon filed a cross-complaint against
Serrano Const, a partnership, and its general partners Barajas and Serrano. Boshes
answered the cross-complaint on behalf of Serrano Const and Barajas. Boshes did not
represent Serrano, and no answer was filed on his behalf. On May 23, 2008 a default was
entered against Serrano on the cross-complaint. Following a bench trial, on March 12,
2009 a judgment on the cross-complaint was entered against Serrano Const, Barajas and
3
Serrano in the sum of $214,832.00 plus prejudgment interest from January 7, 2009. In
early 2011 Brandon initiated a collection action against Serrano in Florida, where he
lived. In response to the collection action Serrano filed for Chapter 7 bankruptcy
protection. (Barajas has also filed for bankruptcy protection.) Tabas, as trustee of
Serrano’s bankruptcy estate, identified the claims asserted in the instant lawsuit as an
asset of the bankruptcy estate.
In his first cause of action for fraud Tabas alleged Boshes undertook a variety of
fraudulent actions to create Serrano Const and to allow it to continue in business despite
the fact Serrano had retired to Florida and ceased all construction business in California
and, in furtherance of the fraud, Boshes actively concealed important facts from Serrano
concerning his and Barajas’s activities. Boshes’s conduct, the complaint alleged, was a
substantial factor in causing harm to Serrano (that is, the judgment against him obtained
in the Brandon litigation). In the second cause of action for professional negligence,
Tabas alleged Boshes owed a duty to Serrano when he undertook representation of
Serrano Const in the Brandon litigation and thereafter breached that duty, in part, by
failing to notify Serrano of the complaint or cross-complaint, to answer the cross-
complaint on behalf of Serrano or to communicate to Serrano settlement offers made by
Brandon. The third cause of action for breach of fiduciary duty alleged Boshes as
attorney for Serrano Const in the Brandon litigation owed a fiduciary duty to Serrano as a
general partner and breached that duty by failing to properly handle the Brandon
litigation on his behalf. Damages for each cause of action were alleged to exceed
$600,000. The complaint also prayed for punitive damages for fraud.
On November 6, 2012 Boshes moved pursuant to section 425.16 to strike the fraud
cause of action in the first amended complaint. In a declaration submitted in support of
the motion Boshes stated he had represented Barajas and Serrano Construction for
approximately 20 years. Barajas had at all times advised Boshes that Serrano
4
2
Construction was a partnership consisting of Barajas and Serrano. Sometime in the early
1990’s Barajas advised Boshes that Serrano was retiring from active involvement in
Serrano Construction but would remain a partner. Barajas also informed Boshes that
Barajas would be the managing partner for Serrano Construction and provided Boshes
with a notarized power of attorney, dated November 11, 1992, signed by Serrano
allowing Barajas to act on his behalf. (A copy of the power of attorney was attached to
the declaration.) According to Boshes, “[a]t no time did I have any reason to know or
suspect that the power of attorney provided to me by Mr. Barajas was not valid and
legitimate.”
The Boshes declaration explained that, after Barajas received the May 15, 1998
letter from CSLB identifying problems with the request to change the qualifying partner
in Serrano Const from Serrano to Barajas, Barajas retained him to respond. Pursuant to
Barajas’s request, Boshes then wrote two letters to the CSLB—the July 30 and
August 14, 1998 letters—based on information provided to him by Barajas. Boshes
insisted he believed the information he provided the CSLB was true. He acknowledged
he had not had any communication with Serrano for at least 10 years and did not consult
with him in connection with the CSLB letters.
Tabas filed an opposition to the motion, which included a declaration from
Brandon, but not Serrano, and a request for judicial notice that contained portions of
deposition testimony by Serrano in the bankruptcy proceedings. Tabas also moved to
strike and objected to portions of the declaration by Boshes. Boshes filed a reply
memorandum and objections to the evidence submitted in opposition to the motion.
At the hearing on January 10, 2013 the court announced its tentative ruling to deny
the motion on the ground Boshes had failed to establish the fraud claim arose from
protected conduct within the meaning of section 425.16: “The fraud claim is based upon
2
Although his declaration refers to “Serrano Construction,” elsewhere Boshes
makes it clear he represented the partnership entity, Serrano Const, not the sole
proprietorship, Serrano Construction.
5
concealment not the submission of documents.” The court also indicated it had sustained
all objections to Tabas’s request for judicial notice and overruled all but one objection to
Boshes’s declaration. The court then heard oral argument and took the matter under
submission.
Later the same day the court entered its ruling denying the motion. The court
concluded the cause of action for fraud was a mixed cause of action “in that at least one
of the underlying alleged acts is protected. . . . [T]he allegations relative to the
submission of applications and letters for evaluation by the Contractor’s Licensing Board
are protected under Code of Civil Procedure, Section 425.16(e)(2), as they qualify as a
written or oral statement or writing made in connection with an issue under consideration
or review by a legislative, executive or judicial body, or any other official proceeding
authorized by law.” Nonetheless, the court ruled Tabas had established the claim of fraud
was legally sufficient and supported by a prima facie showing of facts sufficient to
sustain a favorable judgment: “The submission of the applications and letters to the
licensing board may be privileged. However, the failure to advise Serrano of the contents
of the submissions may support a claim for fraud based upon concealment.”
Boshes filed a timely notice of appeal.
DISCUSSION
1. Section 425.16: The Anti-SLAPP Statute3
Section 425.16, subdivision (b)(1), provides, “A cause of action against a person
arising from any act of that person in furtherance of the person’s right of petition or free
speech under the United States Constitution or the California Constitution in connection
with a public issue shall be subject to a special motion to strike, unless the court
determines that the plaintiff has established that there is a probability that the plaintiff
will prevail on the claim.” Pursuant to subdivision (e), an “‘act in furtherance of a
person’s right of petition or free speech under the United States or California Constitution
3
SLAPP is an acronym for “strategic lawsuit against public participation.” (Vargas
v. City of Salinas (2009) 46 Cal.4th 1, 8, fn. 1.)
6
in connection with a public issue’ includes: (1) any written or oral statement or writing
made before a legislative, executive, or judicial proceeding, or any other official
proceeding authorized by law, (2) any written or oral statement or writing made in
connection with an issue under consideration or review by a legislative, executive, or
judicial body, or any other official proceeding authorized by law, (3) any written or oral
statement or writing made in a place open to the public or a public forum in connection
with an issue of public interest, or (4) any other conduct in furtherance of the exercise of
the constitutional right of petition or the constitutional right of free speech in connection
with a public issue or an issue of public interest.”
In ruling on a motion under section 425.16, the trial court engages in what is now
a familiar, two-step process. “First, the court decides whether the defendant has made a
threshold showing that the challenged cause of action is one arising from protected
activity. The moving defendant’s burden is to demonstrate that the act or acts of which
the plaintiff complains were taken ‘in furtherance of the [defendant]’s right of petition or
free speech under the United States or California Constitution in connection with a public
issue,’ as defined in the statute. (§ 425.16, subd. (b)(1).) If the court finds such a
showing has been made, it then determines whether the plaintiff has demonstrated a
probability of prevailing on the claim. Under section 425.16, subdivision (b)(2), the trial
court in making these determinations considers ‘the pleadings, and supporting and
opposing affidavits stating the facts upon which the liability or defense is based.’”
(Equilon Enterprises v. Consumer Cause, Inc. (2002) 29 Cal.4th 53, 67.)
a. Step one and mixed causes of action
The moving party’s burden on the threshold issue is to show “the challenged cause
of action arises from protected activity.” (Rusheen v. Cohen (2006) 37 Cal.4th 1048,
1056; see Scalzo v. Baker (2010) 185 Cal.App.4th 91, 98.) “[T]he statutory phrase ‘cause
of action . . . arising from’ 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. [Citation.] In the anti-SLAPP context, the critical point is
7
whether the plaintiff’s cause of action itself was based on an act in furtherance of the
defendant’s right of petition or free speech. [Citation.] ‘A defendant meets this burden
by demonstrating that the act underlying the plaintiff’s cause [of action] fits one of the
categories spelled out in section 425.16, subdivision (e) . . . .’” (City of Cotati v.
Cashman (2002) 29 Cal.4th 69, 78.) “If the defendant does not demonstrate this initial
prong, the court should deny the anti-SLAPP motion and need not address the second
step.” (Hylton v. Frank E. Rogozienski, Inc. (2009) 177 Cal.App.4th 1264, 1271.)
When a special motion to strike pursuant to section 425.16 challenges a cause of
action that involves both protected and nonprotected activity (sometimes referred to as a
“mixed” cause of action), “if the allegations of protected activity are only incidental to a
cause of action based essentially on nonprotected activity, the mere mention of the
protected activity does not subject the cause of action to an anti-SLAPP motion.” (Scott
v. Metabolife Internat., Inc. (2004) 115 Cal.App.4th 404, 414; accord, World Financial
Group, Inc. v. HBW Ins. & Financial Services, Inc. (2009) 172 Cal.App.4th 1561, 1574.)
On the other hand, if the allegations of nonprotected conduct are collateral to the
substance of the cause of action, their presence does not prevent the court from applying
the statute. As we explained in Fox Searchlight Pictures, Inc. v. Paladino (2001)
89 Cal.App.4th 294, 308, “[A] plaintiff cannot frustrate the purposes of the SLAPP
statute through a pleading tactic of combining allegations of protected and nonprotected
activity under the label of one ‘cause of action.’” (Accord, Mann v. Quality Old Time
Service, Inc. (2004) 120 Cal.App.4th 90, 103.)
In applying section 425.16 to mixed causes of action, “it is the principal thrust or
gravamen of the plaintiff’s cause of action that determines whether the anti-SLAPP
statute applies [citation], and when the allegations referring to arguably protected activity
are only incidental to a cause of action based essentially on nonprotected activity,
collateral allusions to protected activity should not subject the cause of action to the anti-
SLAPP statute.” (Martinez v. Metabolife Internat., Inc. (2003) 113 Cal.App.4th 181,
188; see Episcopal Church Cases (2009) 45 Cal.4th 467, 477-478 [“This dispute
8
[involving ownership of property] and not any protected activity is ‘the gravamen or
principal thrust’ of the action. [Citation.] The additional fact that protected activity may
lurk in the background—and may explain why the rift between the parties arose in the
first place—does not transform a property dispute into a SLAPP suit.”]; see also Club
Members for an Honest Election v. Sierra Club (2008) 45 Cal.4th 309, 319 [“[t]he
‘principal thrust or gravamen’ test has been used to determine whether an action fits
within the scope of the anti-SLAPP protection provided by section 425.16 when a
pleading contains allegations referring to both protected and unprotected activity”].) That
is, “the cause of action is vulnerable to a special motion to strike under the anti-SLAPP
statute only if the protected conduct forms a substantial part of the factual basis for the
claim.” (A.F. Brown Electrical Contractor, Inc. v. Rhino Electric Supply, Inc. (2006)
137 Cal.App.4th 1118, 1125.)
This analysis does not require an either-or determination or mean the gravamen of
a cause of action must be based only on protected activity or on nonprotected activity.
Rather, the proper statement of the rule, as articulated in Haight Ashbury Free Clinics,
Inc. v. Happening House Ventures (2010) 184 Cal.App.4th 1539, 1551, footnote 7 is:
“[W]here the defendant shows that the gravamen of a cause of action is based on
nonincidental protected activity as well as nonprotected activity, it has satisfied the first
prong of the SLAPP analysis.” (Accord, World Financial Group, Inc. v. HBW Ins. &
Financial Services, Inc., supra, 172 Cal.App.4th at p. 1574.)
b. Step two
If the defendant establishes the statute applies, the burden shifts to the plaintiff to
demonstrate a “probability” of prevailing on the claim. (Equilon Enterprises v.
Consumer Cause, Inc., supra, 29 Cal.4th at p. 67.) In deciding the question of potential
merit, the trial court properly considers the pleadings and evidentiary submissions of both
the plaintiff and the defendant, but may not weigh the credibility or comparative strength
of any competing evidence. (Taus v. Loftus (2007) 40 Cal.4th 683, 713-714; Wilson v.
Parker, Covert & Chidester (2002) 28 Cal.4th 811, 821.) The question is whether the
9
plaintiff presented evidence in opposition to the defendant’s motion that, if believed by
the trier of fact, is sufficient to support a judgment in the plaintiff’s favor. (Zamos v.
Stroud (2004) 32 Cal.4th 958, 965.) Nonetheless, the court should grant the motion “‘if,
as a matter of law, the defendant’s evidence supporting the motion defeats the plaintiff’s
attempt to establish evidentiary support for the claim.’” (Taus, at p. 714; Wilson, at
p. 821; Zamos, at p. 965.)
c. Standard of review
The trial court’s rulings on a special motion to strike are subject to our
independent or de novo review. (Flatley v. Mauro (2006) 39 Cal.4th 299, 325; accord,
Rusheen v. Cohen, supra, 37 Cal.4th at p. 1055.)
2. The Fraud Cause of Action Arises from Protected Petitioning Activity
The essence of Tabas’s fraud claim is that Boshes, in his communications with the
CSLB, affirmatively misrepresented both that Serrano was his client and that Serrano was
4
a partner with Barajas in Serrano Const and then actively concealed those
misrepresentations from Serrano, leading to Brandon’s judgment against Serrano and
Serrano’s ultimate declaration of bankruptcy. In his respondent’s brief Tabas is emphatic
his first cause of action is based on these purported acts of actual fraud, not constructive
5
fraud as Boshes suggested in his opening brief.
4
Boshes’s July 30, 1998 letter begins, “This is in response and reply to your letter
to my clients, Raul Serrano and Jorge Barajas, dated May 15, 1998, addressed to Serrano
Const., returning the application to replace Mr. Barajas from Mr. Serrano as Qualifying
Individual on License Number 571998, for correction and resubmittal.”
5
“A fiduciary’s failure to share material information with the principal is
constructive fraud, a term of art obviating actual fraudulent intent. (Civ. Code, § 1573.)”
(Michel v. Moore & Associates, Inc. (2007) 156 Cal.App.4th 756, 762.) “‘“Constructive
fraud is a unique species of fraud applicable only to a fiduciary or confidential
relationship.” [Citation.] [¶] “[A]s a general principle constructive fraud comprises any
act, omission or concealment involving a breach of legal or equitable duty, trust or
confidence which results in damage to another even though the conduct is not otherwise
fraudulent. Most acts by an agent in breach of his fiduciary duties constitute constructive
fraud. The failure of the fiduciary to disclose a material fact to his principal which might
10
There can be no question Boshes’s July 30, 1998 and August 14, 1998 letters to
the CSLB to change the licensing status of Serrano Const, if considered in isolation,
constituted protected petitioning activity within section 425.16, subdivision (e)(1)
and (2). (See Briggs v. Eden Council for Hope & Opportunity (1999) 19 Cal.4th 1106,
1115 [“‘“[t]he constitutional right to petition . . . includes the basic act of filing litigation
or otherwise seeking administrative action”’”]; Birkner v. Lam (2007) 156 Cal.App.4th
275, 281 [same]; Chavez v. Mendoza (2001) 94 Cal.App.4th 1083, 1087 [same].) Tabas
does not dispute this general proposition but argues Boshes failed to meet the threshold
requirement for application of section 425.16 on three related grounds: (1) In writing the
CSLB Boshes was communicating on behalf of his clients; it was his clients who were
exercising their speech or petitioning rights, not Boshes. (2) Boshes purported to be
acting as Serrano’s counsel; an attorney may not invoke section 425.16 in response to a
lawsuit by a former client. (3) The gravamen of the fraud cause of action is not the
statements to the CSLB but Boshes’s fraud or breach of duties to Serrano in sending the
letters to the CSLB. None of these contentions has merit.
Tabas’s first argument is simply wrong. An attorney sued for statements made on
behalf of a client in a judicial or administrative proceeding or in connection with an issue
under review by a court or governmental agency has standing to bring a motion under
section 425.16. (Briggs v. Eden Council for Hope & Opportunity, supra,19 Cal.4th at
p. 1116 [“the statute does not require that a defendant moving to strike under section
425.16 demonstrate that its protected statements or writings were made on its own behalf
. . . rather than, for example, on behalf of its clients or the general public”]; see
Coretronic Corp. v. Cozen O’Connor (2011) 192 Cal.App.4th 1381, 1388 [“[t]he anti-
SLAPP statutes protect not only the litigants, but also their attorneys’ litigation-related
statements”]; Jespersen v. Zubiate-Beauchamp (2003) 114 Cal.App.4th 624, 629 [“an
affect the fiduciary’s motives or the principal’s decision, which is known (or should be
known) to the fiduciary, may constitute constructive fraud.”’” (Assilzadeh v. California
Federal Bank (2000) 82 Cal.App.4th 399, 415.)
11
attorney who has been made a defendant in a lawsuit based upon a written or oral
statement he or she made on behalf of clients in a judicial proceeding or in connection
with an issue under review by a court, may have standing to bring a SLAPP motion”]; see
also Peregrine Funding, Inc. v. Sheppard Mullin Richter & Hampton (2005)
133 Cal.App.4th 658, 670, fn. 7 (Peregrine Funding) [same].)
Tabas’s second and third arguments overlap and misstate the emerging case law
regarding the applicability of special motions to strike under section 425.16 to lawsuits
for professional negligence filed by former clients against attorneys. To be sure, a
number of appellate decisions have held section 425.16 does not apply to “a garden-
variety legal malpractice claim by clients against lawyers.” (See Thayer v. Kabateck
Brown Kellner LLP (2012) 207 Cal.App.4th 141, 158.) For example, in Freeman v.
Schack (2007) 154 Cal.App.4th 719, clients sued their former attorney, alleging he had
abandoned them to represent adverse interests in their pending class action and in a new
competing class action. The Court of Appeal found the claims did not arise from
protected petitioning activity but from the lawyer’s “undertaking to represent a party with
interests adverse to plaintiffs, in violation of the duty of loyalty he assertedly owed . . . .”
(Id. at p. 732.) The Freeman court concluded the lawyer’s litigation activity was only
incidental to the core allegations the attorney had breached his duty of loyalty in failing
to properly represent plaintiffs’ interests. (Ibid.)
Similarly, in Benasra v. Mitchell Silberberg & Knupp LLP (2004)
123 Cal.App.4th 1179, plaintiffs sued their former law firm for breach of its duty of
loyalty in representing plaintiffs’ opponent in an arbitration proceeding against plaintiffs.
The lawsuit was held not to fall within section 425.16, even though the arbitration was a
protected activity, because the law firm’s breach of its duty of loyalty had occurred when
it abandoned the client and agreed to represent the opponent. The claim did not arise
from the firm’s conduct at the arbitration. (Id. at p. 1189; see generally Chodos v. Cole
(2012) 210 Cal.App.4th 692, 705, 706 [“a ‘garden-variety’ claim for attorney malpractice
[citation] is not covered by the anti-SLAPP statute”; “[w]e deal with a claim based on a
12
breach of duty—malpractice—and not with a claim based on direct communications
concerning a lawsuit”].)
The rationale for excluding professional negligence lawsuits from the ambit of
section 425.16’s first prong was explained by the court in PrediWave Corp. v. Simpson
Thacher & Barlett LLP (2009) 179 Cal.App.4th 1204, “‘A malpractice claim focusing on
an attorney’s incompetent handling of a previous lawsuit does not have the chilling effect
on advocacy found in malicious prosecution, libel, and other claims typically covered by
the anti-SLAPP statute. In a malpractice suit, the client is not suing because the attorney
petitioned on his or her behalf, but because the attorney did not competently represent the
client’s interests while doing so. Instead of chilling the petitioning activity, the threat of
malpractice encourages an attorney to petition competently and zealously.’” (Id. at
p. 1222, quoting Kolar v. Donahue, McIntosh & Hammerton (2006) 145 Cal.App.4th
1532, 1540.)
This rationale is plainly inapplicable to Tabas’s fraud claim against Boshes. The
substance of Tabas’s complaint is that Boshes should not have petitioned the CSLB on
behalf of Serrano at all, not that he failed to do so competently. Indeed, Tabas’s first
amended complaint alleged Serrano “neither authorized nor consented to Boshes’
purported representation of him,” a fact Boshes confirmed in this declaration in support
of the special motion to strike, which stated he had been retained by Barajas on behalf of
6
Serrano Const, not Serrano individually, to respond to the CSLB.
6
The limited record presented in support of and opposition to Boshes’s special
motion to strike provides few details of the actual relationship among Boshes, Barajas
and Serrano over the years. Serrano indicated he had known Boshes since 1989 and
apparently Boshes represented Serrano in several lawsuits. Serrano stated he has had no
contact with Boshes after 1996, and, as discussed, both men vigorously deny Boshes was
representing Serrano in 1998 when he corresponded with the CSLB on behalf of Serrano
Const. Serrano and Barajas had some business dealing with each other in the early
1990’s, but Serrano insisted he was never a partner with Barajas in a construction
business (or with anyone else, for that matter). In a debtor examination in connection
with enforcement of Brandon’s judgment, in contrast, Barajas testified Serrano was a
limited partner in his construction business, Serrano Const.
13
Moreover, contrary to Tabas’s attempt to create a bright-line rule that governs the
case at bar, other cases recognize the applicability of section 425.16 to lawsuits between
lawyer and former client. In Peregrine Funding, supra, 133 Cal.App.4th 658 investors
who had lost millions of dollars in a large Ponzi scheme and the bankruptcy trustee
representing entities that were used to perpetrate the scheme sued a law firm for legal
malpractice and breach of fiduciary duty, claiming its negligence and affirmative
misconduct had aided the perpetrators of the scheme avoid detection and prosecution by
securities regulators. The court held section 425.16 applied, reasoning plaintiffs’ claims
were based in significant part on the law firm’s simultaneously representation of a “co-
client” in Securities and Exchange Commission proceedings—protected petitioning
activity. In the court’s view this differentiated the matter from cases in which attorney’s
communicative action was merely evidence of liability rather than the basis of the
liability. (See Peregrine Funding, at p. 673.) Here, Tabas’s fraud claim is based in
significant part on Boshes’s representation of Serrano Const in petitioning the CSLB, not
solely on any claimed incompetence in representing Serrano individually (who, as noted,
has expressly disavowed any attorney-client relationship existed with Boshes in
connection with the CSLB application).
Perhaps even more directly on point, in Fremont Reorganizing Corp. v. Faigin
(2011) 198 Cal.App.4th 1153, our colleagues in Division Three of this court
distinguished the garden variety legal malpractice cases relied upon by Tabas and held
section 425.16 applicable to a claim a former in-house counsel had violated professional
duties he owed to his former corporate clients by making statements to the Insurance
Commissioner as liquidator of a related company that led to the initiation of an adversary
Although Serrano and Boshes agree Boshes was not representing Serrano in 1998
or at any time thereafter, because Boshes referred to Serrano as his client in the July 30,
1998 letter (although not in the August 14, 1998 letter) to the CSLB, Tabas contends
Boshes should be estopped from denying the existence of an attorney-client relationship.
Resolution of that issue is not necessary to our analysis of Boshes’s special motion to
strike the fraud cause of action.
14
action against his former clients in the liquidation proceedings: “These cases are
distinguishable because the gravamen of FRC’s counts for breach of confidence, breach
of fiduciary duty, and equitable indemnity is that Faigin violated his professional duties
owed to his former clients by making the statements to the Commissioner, rather than by
some other conduct. Faigin’s statements made to the Commissioner are not merely
incidental to these cause of action.” (Id. at p. 1170; see also Thayer v. Kabateck Brown
Kellner LLP, supra, 207 Cal.App.4th at p. 158 [distinguishing a client’s cause of action
against attorney based on acts on behalf of the client and a cause of action based on
attorney’s statements or conduct on behalf of different clients; the former class of claims
“may not be within the ambit of SLAPP”; the other kinds of actions “are”].)
Although Tabas has alleged Boshes improperly concealed from Serrano his
July 30 and August 14, 1998 letters to the CSLB, it is the allegedly false content of the
letters themselves—the petitioning activity on behalf of Serrano Const—that is the
gravamen or principal thrust of the lawsuit. Thus, paragraph 10 of the first amended
complaint alleged, “these two letters contained knowingly false information and were
created by Boshes as part of a fraud whose purpose was to allow Barajas to continue
contracting under license number 571998 . . . .” And paragraph 20 alleged “Serrano was
harmed by Boshes’ actions . . . . These fraudulent acts include but are not limited to:
7
aiding Barajas in obtaining CSLB partnership license number 571998[ ] . . . ; fabricating
the content of the July 30, 1998 letter to the CSLB stating that Serrano would remain a
general partner when he had not had contact with Serrano for two years; fabricating the
August 14, 1998 letter to the CSLB stating that on or about March 1, 1998, Barajas and
Serrano agreed to reconstitute the partnership . . . .” Moreover, according to Tabas, it
was the creation and continuation of Serrano Const, and in particular the July 30, 1998
and August 14, 1998 letters from Boshes to the CSLB confirming Serrano’s ongoing role
7
Although the first amended complaint alleged Boshes had assisted Barajas in the
original license application for Serrano Const, no evidence was presented to support that
allegation in the opposition to Boshes’s special motion to strike.
15
as a partner in the construction business, that directly led to his being named a cross-
defendant in the Brandon litigation, the entry of judgment against him in that lawsuit and
his eventual bankruptcy when faced with Brandon’s collection efforts.
Even acknowledging Tabas has also alleged the purported concealment “was a
substantial factor in causing Serrano’s harm” and any such concealment or failure to
disclose may well be nonprotected activity, the allegations of protected petitioning
activity are far from collateral to the fraud cause of action; to the contrary, they form a
substantial part of the factual basis for the claim. Accordingly, the trial court correctly
ruled Boshes satisfied the first prong of the section 425.16 analysis. (See Haight Ashbury
Free Clinics, Inc. v. Happening House Ventures, supra, 184 Cal.App.4th at p. 1551, fn. 7;
World Financial Group, Inc. v. HBW Ins. & Financial Services, Inc., supra,
172 Cal.App.4th at p. 1574.)
3. Tabas Has Failed To Establish a Probability of Prevailing on the Fraud Claim
Because Boshes made a threshold showing that section 425.16 applies to Tabas’s
fraud cause of action, it became Tabas’s burden to “‘demonstrate that the complaint is
both legally sufficient and supported by a sufficient prima facie showing of facts to
sustain a favorable judgment.’” (Jarrow Formulas, Inc. v. LaMarche (2003) 31 Cal.4th
728, 741.) “The plaintiff may not rely solely on its complaint, even if verified; instead,
its proof must be made upon competent admissible evidence.” (Paiva v. Nichols (2008)
168 Cal.App.4th 1007, 1017; accord, City of Costa Mesa v. D’Alessio Investments, LLC
(2013) 214 Cal.App.4th 358, 376.) Tabas’s limited evidentiary presentation in the trial
8
court failed to make the required showing.
8
Although the trial court’s tentative ruling was to sustain most of Boshes’s
objections to Tabas’s evidentiary presentation and to overrule all but one of Tabas’s
objections to Boshes’s declaration, its order denying the special motion to strike did not
include any ruling on the parties’ objections. Accordingly, we have reviewed all of the
material presented with the special motion to strike and the opposition to the motion.
16
According to Tabas’s evidence, Serrano did not retain Boshes in connection with
Barajas’s effort to replace Serrano as the qualifying partner for Serrano Const and was
unaware of the two letters Boshes wrote to the CSLB concerning Serrano Const until
Brandon’s efforts to enforce the judgment entered on his cross-complaint in litigation
initiated by Boshes on behalf of Barajas “individually and dba Serrano Construction.”
Serrano was not a partner in Serrano Const (at least for purposes of the fraud cause of
action) and did not sign the power of attorney authorizing Barajas to act on his behalf.
(Barajas, in contrast, in deposition testimony attached to Tabas’s request for judicial
notice in opposition to the special motion to strike, insisted Serrano gave him the power
of attorney.) Serrano also testified Boshes did not contact him or disclose anything with
respect to Serrano Const or the CSLB letters during the relevant time period.
Boshes, on the other hand, presented evidence—uncontradicted by Tabas—that he
was retained in 1998 by Barajas to respond on behalf of Serrano Const to the CSLB’s
May 15, 1998 inquiry. As instructed by his client Serrano Const, and in reliance on the
notarized power of attorney, which designated Barajas as Serrano’s attorney-in-fact,
Boshes wrote the CSLB. The information in the two letters was provided by Barajas to
Boshes, and Boshes believed it all to be true. Boshes supplied copies of his letters to
Serrano Const, and all the information provided by Boshes to the CSLB was a matter of
public record and could be accessed at the CSLB website.
Contending the power of attorney was facially defective (that is, ineffective for
reasons other than Serrano’s claim he did not sign it), Tabas asserts Boshes’s reliance on
the document, together with his admitted lack of contact with Serrano in 1998 when
corresponding with the CSLB, is sufficient evidence of an intent to defraud for the
purpose of establishing a probability of prevailing on the fraud claim. The premise for
Both Tabas and Boshes have moved to supplement the appellant record with
material contained in motions to augment, for judicial notice and to take new evidence on
appeal. To the extent we have not previously ruled on those motions, they are denied.
17
this argument—Tabas’s challenge to the validity of the power of attorney—rests on a
fundamental misreading of the instrument.
According to Tabas, the power of attorney would only become effective on
9
Serrano’s incapacity. Tabas fails to recognize the document granted Barajas a general
power of attorney that included an optional durable power of attorney. The general (or
nondurable) power of attorney was effective immediately, and the attorney-in-fact’s
powers would normally be terminated by the principal’s incapacity (see Prob. Code,
§§ 4152, subd. (a)(7), 4155, subd. (a)). The optional durable power of attorney, set forth
in paragraph (h), became effective upon the principal’s (Serrano’s) incapacity but did not
otherwise impair the powers granted. As recited in paragraph (g), “This Power of
Attorney shall not be affected by subsequent incapacity of the principal (and shall remain
effective for a period of one year[] after the disability or incapacity occurs).” Under
Probate Code section 4303, because the power of attorney was presented to Boshes by
the attorney-in-fact designated in the instrument and the power of attorney appeared valid
on its face and included a notary public’s certificate of acknowledgment, Boshes’s good
faith reliance on the power of attorney immunized him from liability for claims brought
10
by, or in the name of, Serrano. Tabas’s evidentiary presentation did nothing to
9
Tabas also contends, in the peculiar, inconsistent pleading-in-the-alternative style
that characterizes his lawsuit, because Serrano was not actually a partner in Serrano
Const and the power of attorney was applicable by its terms only to “mechanics liens or
other interests belong[ing] to me,” the power of attorney did not authorize Barajas to act
as Serrano’s attorney-in-fact with respect to Serrano Const. (In the third cause of action
for breach of fiduciary duty, Tabas pleaded Boshes, as counsel for Serrano Const, owed
fiduciary duties to Serrano as a partner of Serrano Const.) Putting aside how Boshes
could have a duty to disclose information to Serrano if he was neither his client nor a
partner in Serrano Const, a question we need not reach (see fn. 6, above), for purposes of
establishing an intent to defraud, the issue is Boshes’s good faith belief, not the truth of
the underlying facts.
10
Probate Code section 4303 provides, “(a) A third person who acts in good faith
reliance on a power of attorney is not liable to the principal or to any other person for so
acting if all of the following requirements are satisfied: [¶] (1) The power of attorney is
presented to the third person by the attorney-in-fact designated in the power of attorney.
18
undermine the applicability of this statutory immunity to Serrano’s activities at the
request of Barajas and on behalf of Serrano Const.
In sum, the evidence before the trial court, considered without weighing credibility
or comparative strength, was insufficient to establish a prima facie case that Boshes acted
with knowledge of the falsity of his statements to the CSLB (to the extent the claim is
based on affirmative misrepresentations) or intentionally concealed or suppressed
material information (to the extent the claim is one for concealment) and that, in doing
so, he acted with an intent to defraud Serrano—essential elements of his cause of action.
(See Blickman Turkus, LP v. MF Downtown Sunnyvale, LLC (2008) 162 Cal.App.4th
858, 869 [“In the context of fraud by affirmative false statements, the mental element is
commonly stated in terms of intent to induce ‘reliance’ [Citation.] In the context of
fraud by concealment, the more precise formula is probably intent to induce conduct—
action or inaction—that differs from what the plaintiff would have done if informed of
the concealed fact.”]; see generally Robinson Helicopter Co., Inc. v. Dana Corp. (2004)
34 Cal.4th 979, 990 [“[t]he elements of fraud are: (1) a misrepresentation (false
representation, concealment, or nondisclosure); (2) knowledge of falsity (or scienter);
(3) intent to defraud, i.e., to induce reliance; (4) justifiable reliance; and (5) resulting
damage”]; Kaldenbach v. Mutual of Omaha Life Ins. Co. (2009) 178 Cal.App.4th 830,
850 [“the elements of a cause of action for fraud based on concealment are: ‘“(1) the
defendant must have concealed or suppressed a material fact, (2) the defendant must have
been under a duty to disclose the fact to the plaintiff, (3) the defendant must have
intentionally concealed or suppressed the fact with the intent to defraud the plaintiff,
(4) the plaintiff must have been unaware of the fact and would not have acted as he did if
[¶] (2) The power of attorney appears on its face to be valid. [¶] (3) The power of
attorney includes a notary public’s certificate of acknowledgment or is signed by two
witnesses. [¶] (b) Nothing in this section is intended to create an implication that a third
person is liable for acting in reliance on a power of attorney under circumstances where
the requirements of subdivision (a) are not satisfied. Nothing in this section affects any
immunity that may otherwise exist apart from this section.”
19
he had known of the concealed or suppressed fact, and (5) as a result of the concealment
11
or suppression of the fact, the plaintiff must have sustained damage”’”].) At most, the
evidence suggested Boshes may have been less than diligent in relying solely on
Barajas’s statements and the power of attorney without confirming the information
provided with Serrano, not that he had the requisite fraudulent intent. The special motion
to strike the first cause of action for fraud should have been granted.
DISPOSITION
The order denying Boshes’s special motion to strike is reversed. The cause is
remanded to the trial court with directions to enter a new order granting the motion and to
conduct further proceedings to determine the amount of attorney fees and costs to be
awarded Boshes as the prevailing party on the motion. Boshes also is to recover his
attorney fees and costs on appeal in an amount to be determined by the trial court.
PERLUSS, P. J.
We concur:
ZELON, J. SEGAL, J.*
11
Because we find the evidence on the element of scienter insufficient, we do not
address Boshes’s additional arguments that Tabas’s fraud claim is barred by the
applicable statute of limitations, that Boshes’s letters to the CSLB are absolutely
privileged under Civil Code section 47, subdivision (b), and that Boshes had no duty to
communicate directly with Serrano because his client was Serrano Const, not its
individual partners, and he was entitled to deal exclusively with the person he understood
to be its managing partner, Barajas, regarding partnership matters.
* Judge of the Los Angeles Superior Court, assigned by the Chief Justice pursuant to
article VI, section 6 of the California Constitution.
20