Filed 6/29/15
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FOURTH APPELLATE DISTRICT
DIVISION THREE
FINTON CONSTRUCTION, INC.,
Plaintiff and Appellant, G050093
v. (Super. Ct. No. 30-2013-00650607)
BIDNA & KEYS, APLC et al., OPINION
Defendants and Respondents.
Appeal from a judgment of the Superior Court of Orange County, Linda S.
Marks, Judge. Affirmed.
The Layfield Law Firm, Philip J. Layfield and Bradley Wallace for Plaintiff
and Appellant.
Bidna & Keys and Richard D. Keys for Defendants and Respondents.
* * *
This is an appeal from an order granting defense motions pursuant to Code
of Civil Procedure section 425.16,1 the anti-SLAPP statute.2 Plaintiff Finton
Construction, Inc. (FCI or plaintiff) sued defendants Bidna & Keys, APLC (B&K),
Howard N. Bidna, and Jon Longerbone (collectively defendants) for conversion, receipt
of stolen property, and injunctive relief. These causes of action arose from defendants’
receipt of an allegedly stolen hard drive pertinent to a pending case in Los Angeles.
Defendants are the attorneys of record in that case. They moved to dismiss under the
anti-SLAPP statute, arguing the litigation privilege applied and the complaint failed to
state a cause of action as a matter of law. The trial court granted the motion, finding
defendants’ actions privileged and that plaintiff had failed to demonstrate a possibility of
prevailing on the merits. This appeal followed.
We find FCI’s conduct with respect to this entire case demonstrative of a
particularly nasty type of scorched earth tactics. A purportedly stolen hard drive, which
was placed in the hands of defendants solely for litigation purposes, has resulted in an
attempt to disqualify counsel and two efforts to depose counsel in the underlying case, a
police report, complaints to the State Bar of California, and this entirely derivative and
unmeritorious second lawsuit. FCI’s overreach does not suggest zealousness or
righteousness, but a calculated effort to undermine the parties in the underlying case by
turning their attorneys into fellow defendants.
While we strongly suspect that FCI is the prime mover behind the
prosecution of this lawsuit, we remind FCI’s counsel — and indeed, all attorneys — that
while they owe their clients a duty to zealously represent them, that zealousness does not
trump the duty they owe the courts and the judicial process to prosecute only lawsuits
1Unless otherwise indicated, subsequent statutory references are to the Code of Civil
Procedure.
2 “SLAPP is an acronym for ‘strategic lawsuit against public participation.’” (Jarrow
Formulas, Inc. v. LaMarche (2003) 31 Cal.4th 728, 732, fn. 1.)
2
with merit. The type of uncivil behavior and specious tactics demonstrated by filing this
case represents conduct that brings disrepute to the entire legal profession and amounts to
toying with the courts.
Less than 48 hours prior to oral argument, the parties notified us they had
reached a settlement. The court, however, declines the parties’ request to dismiss the
appeal. This is a particularly egregious SLAPP, filed against defendants for the sole
“crime” of representing their clients in the underlying action. The lack of civility
demonstrated in this case is a matter of public interest. Moreover, while we cannot be
certain, it appears that FCI deliberately decided to keep this action pending until the last
possible moment in order to avoid the opinion we write today. We therefore decide in
defendants’ favor3 and publish this case as an example to the legal community of the kind
of behavior the bench and the bar together must continually strive to eradicate.
I
FACTS
The Underlying Lawsuit
In 2012, B&K filed a lawsuit on behalf of Michael Reeves against FCI and
its partners, John Finton and Daniel Tontini, which was styled Reeves v. Finton
Construction et al., case No. BC 485148 (Reeves). The case is still pending in Los
Angeles County. The complaint alleged Reeves and Finton began building custom
homes as a general contractor in the 1980’s and were eventually joined by Tontini. The
company’s stock was owned 40 percent each by Reeves and Finton, and 20 percent by
Tontini. From 2000 onward, Reeves ran the company’s Orange County branch office.
The company was quite successful, with 2010 revenues exceeding $44 million. After
some financial disputes, the complaint alleged, Finton and Tontini unlawfully conspired
3 We do not dispute defendants’ counsel’s comment at oral argument that cases settle at
various times for various reasons. Counsel did not wish to discuss further the reasons for
settlement.
3
to reduce Reeves’s ownership and ultimately terminate his involvement. Reeves sought
an accounting and millions of dollars in damages.
FCI and Finton filed a cross-complaint against Reeves and several FCI
employees who left to join Reeves at his new company, MA3 Corporation. Reeves
continued building homes in Orange County. Among other alleged acts of past
wrongdoing, the cross-complaint alleged Reeves essentially stole FCI’s clients and
wrongfully solicited its employees. It also alleged that before they left FCI, Reeves and
other cross-defendants, including Nicole Lacuesta (also known by her maiden name,
Hechanova), copied various “confidential” documents from FCI’s Orange County office
and copied them to computers at MA3. These documents allegedly included “client lists,
project plans, specifications, bid books, and contact information for valued vendors,
suppliers and subcontractors.” Various computers and cell phones were allegedly stolen.
As pertinent here, the cross-complaint alleged unfair competition, conversion, and
misappropriation of trade secrets.
In April 2012, not long after the cross-complaint was filed, FCI’s counsel,
James Evans, sent Bidna a letter stating that on the day the cross-defendants had resigned
from FCI, one of them, Jim White, had used a company credit card to purchase a hard
drive, which was used to copy files from FCI’s computers. Evans claimed FCI owned
the hard drive and demanded its return. Bidna responded the hard drive would be
returned after his information technology consultant made a copy of the files on it. Evans
offered an “inspection” by the consultant overseen by his own expert, but demanded the
drive be returned without copying the files, stating that if the drive was copied, “we will
take the position that you have taken materials belonging to Finton and/or spoilated
evidence.” Bidna responded that it was unclear the hard drive had any files belonging to
Finton on it, and refused to return it without copying the files.
In July 2012, FCI filed an application for a writ of possession, demanding
Reeves turn over the drive White had purchased, a USB flash drive, and all the hard
4
copies of client files in their possession. Reeves apparently opposed, although the
opposition is not in the record. The application was eventually resolved in August by
way of a stipulated order that directed the drive White had purchased, along with a USB
flash drive, be turned over to FCI’s computer expert, who made copies of the drives and
gave them to Reeves’s attorneys. As relevant here, the stipulated order also stated the
drives may be used for the purposes of the pending litigation.
Lacuesta was deposed in April 2013. She testified that on the day she left
FCI, she copied files that were on the computer that she used at the office. She did not
have permission to do so. She stated she had personal files that she wanted copies of, and
did not have time to sort through them. She did not make any effort to search or sort
through the files. She told Reeves sometime later that she had copied the documents,
which were, at some point, transferred to MA3 computers. She eventually turned
everything over to the attorneys, B&K.
Immediately thereafter, Evans wrote to Bidna demanding the return of the
hard drive Lacuesta testified about. B&K, Attorney Jon Longerbone replied and stated
they were willing to give the drive to Evans on the same terms stipulated to in the August
2012 order. Evans did not accept the offer, or provide a reason as to why he would not
do so.
This was followed shortly thereafter by the filing of the instant case in May,
which we shall discuss below. FCI also filed a report for theft with the Costa Mesa
Police Department and complaints with the State Bar of California against Bidna and
Longerbone. FCI also filed a motion to disqualify defendants in the underlying case,
which they eventually lost. At two different points, the court in the underlying case has
denied FCI’s motions to depose Bidna.
In June 2013, Reeves filed an application in the underlying case regarding
the use of the same drive that was the subject of this case. On October 3, the court
entered an order directing defendants to deliver the drive to FCI’s computer expert. The
5
expert was to make two exact copies of the drive and deliver one to B&K and one to
Evans, with the expert maintaining the original. The duplicate drive was to be used only
for the purposes of the underlying litigation. In sum, this order was essentially similar to
the August 2012 stipulated order.
The Instant Action
Less than a month after Lacuesta’s deposition, on May 20, FCI filed the
instant action against B&K, Bidna, and Longerbone, alleging FCI was entitled to
damages for conversion and receipt of stolen property, and for injunctive relief enjoining
defendants from deleting, accessing, or in any way using the data on the purportedly
stolen drive.
In July, defendants filed a special motion to strike pursuant to the anti-
SLAPP statute. They argued their actions were with the scope of Civil Code section 47
(the litigation privilege) and FCI could not state a cause of action. FCI argued in its
opposition that the anti-SLAPP statute did not apply and it had stated a prima facie case
for each cause of action. As evidence, they submitted an excerpt from Lacuesta’s
deposition discussing the transfer of the files to the hard drive (as summarized above),
and an unreported case from 2005.4 FCI’s request for judicial notice submitted the cross-
complaint, the first amended complaint, and the October 3 court order from the
underlying case. No other evidence was offered by FCI.
In their reply, in addition to their previous arguments, defendants claimed
the complaint was moot, given the October 3 order in the underlying action permitting
defendants to possess a copy of the hard drive for the limited purpose of using it in that
4 Despite FCI’s claim that it was “not citing to the case,” it nonetheless referred to it in a
footnote in its opposition, stating it would “like to direct the court’s attention” to the case.
We fail to see the distinction. Counsel are warned not to cite to cases with no
precedential authority.
6
case. Accordingly, they argued, the order cuts off any claim that defendants were
wrongfully in possession of FCI property. With respect to FCI’s argument that section
425.16 did not apply, defendants asserted Bidna’s unrefuted declaration “conclusively
establishes that everything Bidna & Keys did relative to the hard drive and the files on it
was in the course and scope of representing its clients in investigating the allegations of
[FCI’s] cross-complaint,” and was, accordingly, protected activity. FCI submitted
supplemental briefing arguing the case was not moot, and later, at the court’s request,
both parties filed supplemental briefs on the issue of communicative conduct.
The motion was decided in February 2014 in defendants’ favor. The court
concluded the allegations of the complaint were subject to the anti-SLAPP statute, the
defendants’ actions were subject to the litigation privilege, and FCI had otherwise failed
to demonstrate a probability of prevailing.
FCI filed the instant appeal.
II
DISCUSSION
A. Jurisdiction and Standard of Review
An order denying a special motion to strike is subject to immediate appeal.
(§ 425.16, subd. (i).) We exercise independent judgment to determine whether the
motion to strike should have been granted. (Flatley v. Mauro (2006) 39 Cal.4th 299,
325.) In conducting our review, “[w]e consider ‘the pleadings, and supporting and
opposing affidavits . . . upon which the liability or defense is based.’ [Citation.]”
(Soukup v. Law Offices of Herbert Hafif (2006) 39 Cal.4th 260, 269, fn. 3.)
B. The Statutory Framework
A SLAPP suit is “a meritless suit filed primarily to chill the defendant’s
exercise of First Amendment rights.” (Wilcox v. Superior Court (1994) 27 Cal.App.4th
7
809, 815, fn. 2, disapproved of on other grounds in Equilon Enterprises v. Consumer
Cause, Inc. (2002) 29 Cal.4th 53, 68, fn. 5.) In response, the Legislature adopted the
anti-SLAPP statute, which states: “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.”
(§ 425.16, subd. (b)(1).)
As relevant here, acts subject to the statute include: “(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. . . (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.” (§ 425.16, subd. (e).)
The purpose of the statute is to dismiss meritless lawsuits designed to chill
the defendant’s free speech rights at the earliest stage of the case. (See Wilcox v.
Superior Court, supra, 27 Cal.App.4th at p. 815, fn. 2.) It is to be “construed broadly.”
(§ 425.16, subd. (a).)
Trial courts evaluate motions brought under the statute using a 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).)’” (Jarrow Formulas, Inc. v. LaMarche, supra, 31
8
Cal.4th at p. 733.) If that requirement is met, the court then proceeds to the second step
to determine whether the plaintiff has demonstrated a probability of prevailing on the
claim. (Ibid.) “Only a cause of action that satisfies both prongs of the anti-SLAPP
statute—i.e., that arises from protected speech or petitioning and lacks even minimal
merit—is a SLAPP, subject to being stricken under the statute.” (Navellier v. Sletten
(2002) 29 Cal.4th 82, 89.)
C. Protected Activity
We must first consider whether the challenged claims arise from acts in
furtherance of the defendants’ right of free speech or right of petition under one of the
categories set forth in section 425.16, subdivision (e). (Braun v. Chronicle Publishing
Co. (1997) 52 Cal.App.4th 1036, 1042-1043.) In doing so, “[w]e examine the principal
thrust or gravamen of a plaintiff’s cause of action to determine whether the anti-SLAPP
statute applies . . . .” (Ramona Unified School Dist. v. Tsiknas (2005) 135 Cal.App.4th
510, 519-520.)
“We assess the principal thrust by identifying ‘[t]he allegedly wrongful and
injury-producing conduct . . . that provides the foundation for the claim.’ [Citation.]”
(Hylton v. Frank E. Rogozienski, Inc. (2009) 177 Cal.App.4th 1264, 1272.) We keep in
mind that “[i]n the anti-SLAPP context, the critical consideration is whether the cause of
action is based on the defendant’s protected free speech or petitioning activity.
[Citations.]” (Navellier v. Sletten, supra, 29 Cal.4th at p. 89.) If the mention of protected
activity is “only incidental to a cause of action based essentially on nonprotected
activity,” then the anti-SLAPP statute does not apply. (Scott v. Metabolife Internat., Inc.
(2004) 115 Cal.App.4th 404, 414.)
This determination is a very easy one in the instant case. “[A]ny act”
(§ 425.16, subd. (b)(1)) “includes communicative conduct such as the filing, funding, and
prosecution of a civil action. [Citation.] This includes qualifying acts committed by
9
attorneys in representing clients in litigation. [Citations.]” (Rusheen v. Cohen (2006) 37
Cal.4th 1048, 1056.) “Under the plain language of section 425.16, subdivisions (e)(1)
and (2), as well as the case law interpreting those provisions, all communicative acts
performed by attorneys as part of their representation of a client in a judicial proceeding
or other petitioning context are per se protected as petitioning activity by the anti-SLAPP
statute. . . .” (Cabral v. Martins (2009) 177 Cal.App.4th 471, 479-480.)
It is unquestionable and undisputed that the acts alleged in the complaint all
arise out of defendants’ representation of their clients in the underlying case. The only
reason the hard drive was ever turned over to defendants is because they were counsel in
that matter. The only purported reason defendants are being sued is because they refused
to unconditionally return the hard drive, which constitutes potential evidence in the
underlying matter. In reality, it seems they are being sued for representing their clients.
FCI’s only real argument on this point is that where the activity at issue is
illegal as a matter of law, the defendant is precluded from availing itself of the anti-
SLAPP statute, citing Flatley v. Mauro, supra, 39 Cal.4th at page 320. Flatley, however,
is a very narrow exception. It applies only “where either the defendant concedes the
illegality of its conduct or the illegality is conclusively shown by the evidence . . . .”
(Id. at p. 316.) In Flatley, the conclusive evidence was an extortionate letter from the
defendant. (Id. at pp. 307-309.) Subsequently it has been recognized that “the Supreme
Court’s use of the phrase ‘illegal’ [in Flatley] was intended to mean criminal, and not
merely violative of a statute.” (Mendoza v. ADP Screening & Selection Services, Inc.
(2010) 182 Cal.App.4th 1644, 1654 (Mendoza); see also Cabral v. Martins, supra, 177
Cal.App.4th at p. 482 [evading child support obligations insufficient to take case outside
of scope of anti-SLAPP statute].) The Mendoza court noted: “[A] reading of Flatley to
push any statutory violation outside the reach of the anti-SLAPP statute would greatly
weaken the constitutional interests which the statute is designed to protect.” (Mendoza,
supra, 182 Cal.App.4th at p. 1654.) FCI, as we will discuss post, has come nowhere
10
close to conclusively establishing criminal conduct on the part of defendants. Therefore,
this narrow exception does not apply.
Defendants have met their burden to demonstrate their conduct arose from
protected activity. We therefore turn to the second prong of the anti-SLAPP statute.
D. Likelihood of Prevailing
In the second step, we must determine whether plaintiff has demonstrated a
probability of prevailing on the merits. To do so, plaintiff must state and substantiate a
legally sufficient claim (Briggs v. Eden Council for Hope & Opportunity (1999) 19
Cal.4th 1106, 1122-1123), thereby demonstrating his case has at least minimal merit.
(Cole v. Patricia A. Meyer & Associates, APC (2012) 206 Cal.App.4th 1095, 1105.)
“Put another way, the plaintiff ‘must demonstrate that the complaint is both
legally sufficient and supported by a sufficient prima facie showing of facts to sustain a
favorable judgment if the evidence submitted by the plaintiff is credited.’ [Citations.]”
(Wilson v. Parker, Covert & Chidester (2002) 28 Cal.4th 811, 821.) Accordingly, FCI
“must produce evidence that would be admissible at trial. [Citation.]” (HMS Capital,
Inc. v. Lawyers Title Co. (2004) 118 Cal.App.4th 204, 212.)
1. Litigation Privilege
The litigation privilege, as pertinent here, states: “A privileged publication
or broadcast is one made: [¶] . . . [¶] (b) In any . . . (2) judicial proceeding . . . .” (Civ.
Code, § 47, subd. (b).) “The principal purpose of [Civil Code] section 47[, subdivision
(b),] is to afford litigants . . . the utmost freedom of access to the courts without fear of
being harassed subsequently by derivative tort actions. [Citations.]” (Silberg v.
Anderson (1990) 50 Cal.3d 205, 213.) The privilege also “promotes the effectiveness of
judicial proceedings by encouraging attorneys to zealously protect their clients’
interests.” (Id. at p. 214.)
11
“Although originally enacted with reference to defamation [citation], the
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 . . . . [Citations.]” (Silberg v.
Anderson, supra, at p. 212.) “The breadth of the litigation privilege cannot be
understated. It immunizes defendants from virtually any tort liability (including claims
for fraud), with the sole exception of causes of action for malicious prosecution.
[Citation.]” (Olsen v. Harbison (2010) 191 Cal.App.4th 325, 333.) “Any doubt about
whether the privilege applies is resolved in favor of applying it. [Citation.]” (Kashian v.
Harriman (2002) 98 Cal.App.4th 892, 913.)
A broad range of conduct has been determined by courts to be within the
scope of the privilege, including activity preparatory to litigation. (See, e.g., Gootee v.
Lightner (1990) 224 Cal.App.3d 587, 589 [administering of psychological testing and
destroying raw data within scope of privilege].) Indeed, even materials obtained illegally
by the litigants and turned over to attorneys have been subject to the privilege. (Scalzo v.
Baker (2010) 185 Cal.App.4th 91, 102 (Scalzo).) Transmitting potential evidence in
pending litigation between a client and an attorney is a communicative act relating to the
preparation of the case.
In Scalzo, which involved a dispute between two brothers, the defendant,
Martin Scalzo, illegally obtained Frederick Scalzo’s credit card statements to find
information that might help his case. Frederick sued both Martin and his attorneys and
accountants for injunctive relief. As to the attorneys and accountants, the court held the
litigation privilege applied, finding “Frederick has made no claim, or factual showing,
that they obtained the documents in violation of the law, or used the documents in any
12
manner outside of the litigation context.”5 (Scalzo, supra, 185 Cal.App.4th at p. 102.)
“‘Silberg leaves no room for doubt: For policy reasons, even an act committed
fraudulently or with malice is privileged under section 47, subdivision (b)’ [Citations.]”
(Ibid.)
Such reasoning compels the same result here. Without the litigation
privilege, attorneys would simply be unable to do their jobs properly. No attorney can
litigate a trade secret case without examining the disputed materials to determine if they
constitute trade secrets or even contain any relevant data at all. Indeed, FCI, by entering
into a stipulation in the underlying case allowing defendants to review other materials for
the purposes of litigation only, can hardly deny this obvious point. The same concern
likely led the trial court in the underlying case to the same conclusion, resulting in the
October 2013 order permitting defendants to maintain a copy. The litigation privilege,
therefore, applies to defendants’ actions in terms of both receiving and retaining the drive
until it was turned over pursuant to the court’s order in the underlying case.
2. Failure to State a Claim
Even if the litigation privilege did not render prevailing on the merits
impossible, FCI has nonetheless failed to meet its burden to show it could have done so.
A cause of action for conversion requires a plaintiff to show: “(1) the plaintiff’s
ownership or right to possession of the property; (2) the defendant’s conversion by a
wrongful act or disposition of property rights; and (3) damages.” (Burlesci v. Petersen
(1998) 68 Cal.App.4th 1062, 1066.) The criminal statute for receipt of stolen property6
5 FCI tries mightily to distinguish Scalzo, arguing that the mere allegation defendants
illegally obtained and retained the drive is sufficient. They are wrong. An anti-SLAPP
motion, as we will discuss post, requires evidence, not mere allegations.
6 We assume for the sake of argument only that receipt of stolen property is also a civil
tort.
13
(Penal Code, § 496, subd. (a)) requires demonstrating “(1) that the particular property
was stolen, (2) that the accused received, concealed or withheld it from the owner
thereof, and (3) that the accused knew that the property was stolen. [Citation.]”7
(People v. Moses (1990) 217 Cal.App.3d 1245, 1250.)
Thus, both of these claims turn on the question of whether the drive was
indeed stolen, or put another way, whether FCI had the right to ownership or possession.
The only evidence FCI submitted in support of its anti-SLAPP motion (besides an
uncitable case) was an excerpt from Lacuesta’s deposition. An anti-SLAPP motion is an
evidentiary motion. Once the court reaches the second prong of the analysis, it must rely
on admissible evidence, not merely allegations in the complaint or conclusory statements
by counsel. FCI’s evidence falls far short of what is needed to establish a prima facie
case of either conversion or receipt of stolen property.
In her deposition, Lacuesta does not admit to stealing, or wrongfully taking
or copying anything. She testified that she did not ask Finton or Tontini (or Reeves, for
that matter) for permission to make the copy because she did not “think I needed to.”
FCI offered no evidence to refute this statement.
Additionally, merely alleging ownership of the drive or the information
contained on it is insufficient to establish conversion. The record reflects that Reeves is
still a 40 percent partner in FCI, and therefore, it is far from clear that he did not have a
right equal to that of Finton or Tontini in terms of access to and copying of any FCI
records. FCI’s scant evidence in support of its opposition to the anti-SLAPP motion fails
to establish any of these facts. Further, even if FCI was the undisputed owner, there was
no evidence whatsoever offered to prove that defendants “knowingly” received stolen
property at any time. At best, the status of the property continues to be disputed. FCI,
7 FCI’s final claim is for “injunction,” but an injunction is a remedy, not a cause of
action. Without another valid cause of action that would warrant such relief, it cannot
stand.
14
accordingly, failed to “‘demonstrate that the complaint is both legally sufficient and
supported by a sufficient prima facie showing of facts to sustain a favorable judgment if
the evidence submitted by the plaintiff is credited.’ [Citations.]” (Wilson v. Parker,
Covert & Chidester, supra, 28 Cal.4th at p. 821.) The anti-SLAPP motion was properly
granted.8
III
DISPOSITION
The judgment is affirmed. Defendants are entitled to their costs on appeal.
Unfortunately, as attorneys representing themselves, they are not entitled to the legal fees
awarded by right to prevailing defendants in anti-SLAPP cases. (§425.16, subd. (c)(1).)
MOORE, ACTING P. J.
WE CONCUR:
ARONSON, J.
THOMPSON, J.
8Because the anti-SLAPP motion was properly decided on its merits, we need not
address whether mootness provides an additional ground for dismissal.
15