Chiu v. Collectronics

Filed 10/19/06 Chiu v. Collectronics CA1/5

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 977(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 977(b). This opinion has not been certified for publication or ordered published for purposes of rule 977.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION FIVE

Collectronics, Inc. (Collectronics) appeals from the denial of its anti-SLAPP motion to strike the complaint of respondents Sharon Chiu and Christina Seelye. (Code Civ. Proc., § 425.16.)^[1] Collectronics contends that respondents failed to establish a probability of prevailing on their claims, and that the wrongdoing alleged by respondents as the basis for their complaint was subject to the litigation privilege set forth in Civil Code section 47. Respondents urge that the trial court correctly found that they had established a probability of prevailing on the merits of their claims, but further contend that the appeal should be dismissed as moot. They also argue that if the trial court’s order is reversed they should not be liable for attorney fees under the anti-SLAPP statute. We reverse and remand for further proceedings regarding attorney fees consistent with this opinion.

I. FACTS AND PROCEDURAL HISTORY

In 2002, Chiu and Seelye were principals of Elibrium, Inc. Elibrium, Inc., failed

to pay a supplier over $43,000. In February 2003, the supplier assigned the bill for collection to Creditors Trade Association, Inc. (CTA). This led to collection cases known as Elibrium I and Elibrium II, as well as the matter now before us.

A. The Collection Cases

1. Elibrium I

CTA’s subsidiary, Fund Recovery Services, Inc. (Fund), sued Elibrium, Inc., in San Mateo County Superior Court on the assigned claim (Elibrium I). Represented by attorney Anthony L. Head, Fund obtained a default judgment against Elibrium, Inc., in July 2003.

2. Elibrium II

When attempting to enforce the judgment rendered in Elibrium I, CTA learned that Elibrium, Inc., had transferred its assets to a company called Elibrium, LLC. In August 2003, CTA, represented by attorney Head, brought suit against Elibrium, LLC, and Chiu in San Mateo County Superior Court alleging a fraudulent conveyance of assets (Elibrium II). In December 2003, CTA obtained a default judgment in this action against Elibrium, LLC, and Chiu for over $50,000.

In February 2004, CTA levied on a bank account of Elibrium, LLC. Six days later, Elibrium, LLC, and Chiu, claiming ignorance of the debt and the Elibrium II lawsuit, brought a motion to quash the levy and to set aside the default judgment entered against them. CTA associated attorney Douglas B. Provencher. The court denied the motion, as well as respondents’ subsequent motion for reconsideration in March 2004. The orders were affirmed. (Creditors Trade Association, Inc. v. Elibrium, Feb. 23, 2005, 2005 Cal.App. Unpub. LEXIS 514.) The result of Elibrium II, therefore, was a final judgment against Elibrium, LLC, and Chiu for the underlying debt of Elibrium, Inc.

3. Elibrium I Resolved

In April 2004, Seelye and Elibrium, Inc., brought a motion in San Mateo County Superior Court to vacate the default and default judgment against them in Elibrium I, claiming that neither defendant was served with the complaint and summons. The court vacated that judgment in July 2004. Fund’s litigation against Seelye and Elibrium, Inc., went forward in Elibrium I, while the appeal of CTA’s judgment against Chiu and Elibrium, LLC, was pending in Elibrium II.

In February 2005, Elibrium, Inc., allowed judgment to be entered against it for $56,479.18 in Elibrium I. At this point there were judgments in both Elibrium I and in Elibrium II based on the same underlying debt.

B. Issues Presented in This Proceeding

In November 2004, while the appeal in Elibrium II was still pending, Chiu and Seelye filed a lawsuit in San Mateo County Superior Court against CTA, Fund, Gary E. Looney (CTA’s president), attorneys Head and Provencher, the law firm of Provencher & Flat, LLP, Kevin Ardoin (the process server), and appellant Collectronics. When advised that venue was improper, Chiu and Seelye dismissed and refiled their action in San Francisco Superior Court on December 15, 2004.

Chiu and Seelye alleged that all of the defendants, including Collectronics, engaged in a conspiracy to obtain default judgments in collection cases by filing false proofs of service of the complaint and summons. Specifically, Chiu and Seelye alleged: “. . . continually from at least January 2003, through the date this complaint is filed, Defendants, and each of them, knowingly and willfully entered into a conspiracy to perpetrate a fraud on every court in California wherein Defendants have filed hundreds of collection actions, as well as a fraud on the defendants in such actions, by falsely claiming that defendants had been served with summons and complaint. The result of this conspiracy is that Defendants obtained default judgments to which they would not otherwise have been entitled, and from those judgments, Defendants were able to either collect the full amounts of monies that Defendants contended were owed, or coerce settlements.” Chiu and Seelye further alleged that the false proofs of service, which omitted the language “under penalty of perjury,” and the writs of execution the defendants had obtained based on the default judgments, violated the Unfair Competition Law (Bus. & Prof. Code, § 17200 et seq. (UCL)) and constituted an abuse of process. In an additional cause of action, they asked the court to set aside the default judgment in Elibrium II--the same request that the San Mateo County Superior Court had previously denied.

Collectronics brought a motion to strike Seelye and Chiu’s complaint under the “anti-SLAPP” provisions of section 425.16. Collectronics contended that the complaint targeted Collectronics’ exercise of its constitutional rights of petition and speech. In addition, Collectronics asserted, any purported wrongdoing alleged by appellants was protected by the litigation privilege set forth in Civil Code section 47.

A declaration in support of the motion also averred that Collectronics was a separate collection agency acquired by CTA in 2000, and that it had never sued Chiu, Seelye, or their companies, had never filed a pleading in Elibrium I or Elibrium II, and had never obtained a judgment against them or taken any action against them.

In their opposition to the motion to strike, Chiu and Seelye argued that Collectronics was nevertheless liable as a coconspirator with the other defendants, or under theories of alter ego, succession, respondeat superior, or agency. They submitted evidence which, they claimed, established a prima facie case of abuse of process and violation of the UCL.

Collectronics’ motion was heard on January 19, 2005, and denied by written order on February 28, 2005.^[2] The court found that there were disputed factual issues and credibility questions that could not be resolved in the context of the motion to strike, but that Chiu and Seelye’s evidence demonstrated a probability of prevailing on their causes of action for abuse of process and violation of the UCL.^[3] The court further found that the causes of action were not barred by the litigation privilege of Civil Code section 47, reasoning that acts to collect a debt are not subject to the litigation privilege if they go beyond providing notice of an interest in the subject’s assets.

Collectronics moved for reconsideration on March 9, 2005. While its motion was pending, Collectronics filed this appeal on April 29, 2005. (See § 425.16, subd. (i) [denial of anti-SLAPP motion is appealable under § 904.1].)^[4]

During the pendency of this appeal, our Supreme Court issued its decision in Rusheen, supra, 37 Cal.4th 1048--which, as discussed post, confirms that Collectronics’ alleged wrongdoing was privileged under Civil Code section 47. Apparently recognizing the impact of Rusheen on the viability of their case, in April 2006 Chiu and Seelye sought to voluntarily dismiss their complaint against Collectronics. Collectronics, however, refused to dismiss its appeal. In May 2006, Chiu and Seelye filed a motion to dismiss the appeal on the ground it was moot. By order filed on June 14, 2006, we denied the motion without prejudice, but permitted Chiu and Seelye to address the mootness issue in their briefs on the merits.

II. DISCUSSION

Section 425.16 authorizes a defendant to file a special motion to strike any cause of action that the plaintiff brought primarily to chill the exercise of the defendant’s constitutional rights of free speech and petition.^[5] It establishes a procedure by which the trial court evaluates the merits of the lawsuit using a summary-judgment-like procedure at an early stage of the litigation. (Flatley v. Mauro (2006) 39 Cal.4th 299, 312 (Flatley); Varian Medical Systems, Inc. v. Delfino (2005) 35 Cal.4th 180, 192 (Varian).) In its motion, the defendant must make a prima facie showing that the plaintiff’s cause of action arises from the defendant’s free speech or petition activity. The burden then shifts to the plaintiff to establish a probability of prevailing on the claim. (Equilon Enterprises v. Consumer Cause, Inc. (2002) 29 Cal.4th 53, 67 (Equilon).) If the plaintiff fails to do so, the motion to strike is granted and the prevailing defendant is entitled to recover his or her attorney fees and costs. (§ 425.16, subd. (c).)

In opposing an anti-SLAPP motion, respondents were required both to plead a legally sufficient cause of action and to make a prima facie showing of facts by admissible evidence sufficient to sustain a favorable judgment. (Equilon, supra, 29 Cal.4th at p. 67; Paulus v. Bob Lynch Ford, Inc. (2006) 139 Cal.App.4th 659, 685 (Paulus).) “The burden on the plaintiff is similar to the standard used in determining motions for nonsuit, directed verdict, or summary judgment.” (Kyle v. Carmon (1999) 71 Cal.App.4th 901, 907-908.)

A. Standard of Review

“‘Review of an order granting or denying a motion to strike under section 425.16 is de novo. [Citation.] We consider “the pleadings, and supporting and opposing affidavits . . . upon which the liability or defense is based.” (§ 425.16, subd. (b)(2).) However, 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.)

In the matter before us, the parties agreed that Collectronics’ alleged wrongdoing was activity subject to section 425.16. The question before the trial court was whether Chiu and Seelye had demonstrated a reasonable probability of prevailing on the merits.

In denying Collectronic’s motion to strike, the trial court found that Seelye and Chiu had submitted admissible evidence sufficient to establish their prima facie case for abuse of process and violation of the UCL, and that the litigation privilege of Civil Code section 47 did not apply. We examine the sufficiency of the evidence and the litigation privilege in turn.

B. Respondents Established a Prima Facie Case of Liability

As noted, Seelye and Chiu asserted two causes of action against Collectronics: the tort of abuse of process and, based on the same underlying wrongdoing, a violation of the UCL.^[6] Because the UCL proscribes any unfair or fraudulent business act or practice, evidence sufficient to establish an abuse of process will, for these purposes, be sufficient as well to establish a violation of the UCL.

The tort of abuse of process targets a person’s use of a legal process against another person to accomplish a purpose for which the legal process was not designed. To

establish an abuse of process claim, the plaintiff must show that the party employing the legal process (1) had an ulterior motive and (2) perpetrated a willful act in using the process in a manner that is not proper in the regular conduct of the proceedings. (Drum v. Bleau, Fox & Associates (2003) 107 Cal.App.4th 1009, 1019 (Drum); Oren Royal Oaks Venture v. Greenberg, Bernhard, Weiss & Karma, Inc. (1986) 42 Cal.3d 1157, 1168.)

Collectronics contends that Chiu and Seelye presented no evidence that

Collectronics itself took any action against them. The complaint, however, alleges that Collectronics was one of several parties engaged in a conspiracy, and that in the course of this conspiracy the “Defendants” perpetrated the alleged wrongdoing. In a conspiracy, the act of one defendant is the act of all other defendants if perpetrated in furtherance of the conspiracy. (Unruh v. Truck Insurance Exchange (1972) 7 Cal.3d 616, 631.) Thus, as long as Collectronics was part of the conspiracy, it may be liable without proof that it took any action against Chiu and Seelye itself.

Chiu and Seelye provided ample evidence from which the trial court could conclude that the declarations of service, signed by process server Ardoin, were fraudulent. As to service in Elibrium I, declarations submitted by Seelye and the purported recipient of service, Charles H. DeLacey, provided a detailed explanation why service was not and could not have been obtained as Ardoin asserted, including the fact that, at the time of the purported service, DeLacey did not work at Elibrium and the company was no longer located at the address at which service supposedly occurred. As to Elibrium II, Chiu’s declaration and documentary evidence demonstrated that she also was not served as set forth in Ardoin’s declaration. Additional evidence linked CTA, Fund, Looney, and Head to Ardoin’s declarations of service. And in both Elibrium I and Elibrium II, CTA or Fund, represented by Head, there was evidence that these declarations of service were used to obtain default judgments and willfully used the legal process in an improper manner. (See Kappel v. Bartlett (1988) 200 Cal.App.3d 1457, 1460, 1467 (Kappel) [abuse of process claim stated where process server filed fraudulent declaration of service and default judgment was entered].)

There was also evidence that Fund, Looney, Head, and Ardoin had conspired to obtain default judgments against other parties in the same manner. The declaration of Peter B. Snyderman described a telephone call from Head, informing him that a default judgment had been entered against him 13 months earlier in a lawsuit of which Snyderman had no notice, and in which he had never been served. Snyderman asked Head to provide a copy of the proof of service, but Head declined. Snyderman subsequently received a letter from Looney regarding a collection lawsuit brought by Fund, demanding immediate payment of this same debt.

Michael Zamani submitted a declaration in which he stated that Fund, owned by Looney, obtained default judgments against him and his company in two lawsuits. Zamani asserted that the complaints were never served on him and he had no notice of the lawsuits, and he provided a detailed explanation why the declaration of service was fraudulent. In that matter, Head was Fund’s attorney of record, Ardoin had signed the proofs of service, and Head and Looney operated out of the same office.

Finally, there was evidence to support a claim that Collectronics was part of this conspiracy. A verified complaint filed in July 2004 in San Francisco Superior Court, styled Norton v. Collectronics, Inc., et al. (case No. 433287), indicated that Norton and his wife sued Collectronics, Provencher, Head, and Looney for malicious prosecution and abuse of process. The Nortons alleged that the defendants engaged in a conspiracy and wrongfully tried to force them to forego causes of action they had against the defendants for prior wrongful conduct. According to the verified complaint, although Collectronics had not itself brought an action against the Nortons, it participated in the conspiracy in that it “instructed the other defendants to chase Norton for money Collectronics knew he did not owe any of the defendants.” Further, the Nortons alleged: “Collectronics cashed Norton’s checks. Collectronics purportedly was assigned the debt used to pursue Norton. Collectronics funded the underlying suits, and much more.” The verified complaint also alleged that “[e]ach of the defendants conspired with each other by using perjured documents, false documents, and perjury on the witness stand.” In addition, it was alleged that Looney and his wife owned all the defendant corporations, including Collectronics and CTA, and Head and Provencher conspired with them to perpetrate the alleged wrongdoing.^[7]

Collectronics contends that the Norton complaint was not admissible evidence. We disagree. The allegations of the Norton complaint were relevant, because they tended to show that Collectronics and its codefendants had a practice of conspiring to file and collect upon default judgments obtained by the use of fraudulent proofs of service. The complaint was not inadmissible hearsay in this context, because it was verified. As to matters not alleged on information and belief, the Nortons declared the allegations to be true under penalty of perjury, and the verifications otherwise complied with the requirements for a declaration under section 2015.5.^[8]

Collectronics also argues that Chiu and Seelye failed to provide evidence of the ulterior motive necessary to establish an abuse of process, such as evidence of an intent to harm their victims financially. For this proposition, they rely on Drum, supra, 107 Cal.App.4th at page 1020. Drum recognized, however, that the ulterior motive element may be inferred from the willful abuse of the process. (Ibid.) Chiu and Seelye’s complaint alleged that “Defendants’ actions were undertaken for the ulterior purpose of impairing its adversaries’ ability to defend the actions brought against them, and with the intent, and effect, of obtaining an increased number of default judgments from which Defendants could either collect the full amounts of the default judgments, or coerce settlements from Defendants’ victims.” A reasonable trier of fact could conclude, from the admissible evidence presented, that the conspiring defendants intended to harm Chiu and Seelye in this manner, to their financial detriment. (See Kappel, supra, 200 Cal.App.3d at pp. 1465-1467.)

The evidence was therefore sufficient to establish a prima facie case against appellants, unless their conduct fell within the scope of the litigation privilege. The litigation privilege is relevant to the second step in the anti-SLAPP analysis in that it may present a substantive defense plaintiff must overcome to demonstrate a probability of prevailing. (Flatley, supra, 39 Cal.4th at p. 323.)

C. Civil Code Section 47 Privilege

1. Scope of the Litigation Privilege

Civil Code section 47, subdivision (b)(2), provides an absolute privilege for statements “(1) made in [a] judicial or quasi-judicial proceeding; (2) by litigants or other participants authorized by law; (3) to achieve the objects of the litigation; and (4) [having] some connection or logical relation to the action.” (Silberg v. Anderson (1990) 50 Cal.3d 205, 212 (Silberg).) “The litigation privilege has been applied in ‘numerous cases’ involving ‘fraudulent communication or perjured testimony.’” (Flatley, supra, 39 Cal.4th at p. 322, citing Silberg, supra, at p. 218; Home Ins. Co. v. Zurich Ins. Co. (2002) 96 Cal.App.4th 17, 20, 22-26 [attorney’s misrepresentation of available insurance policy limits to induce the settlement of a lawsuit]; Doctors’ Co. Ins. Services v. Superior Court (1990) 225 Cal.App.3d 1284, 1300 [subornation of perjury]; Carden v. Getzoff (1987) 190 Cal.App.3d 907, 915 [perjury]; Steiner v. Eikerling (1986) 181 Cal.App.3d 639, 642-643 [preparation of a forged will and presentation of it for probate]; O’Neil v. Cunningham (1981) 118 Cal.App.3d 466, 472-477 [attorney’s letter sent in the course of judicial proceedings allegedly defaming his client]; see also Manufacturers Life Ins. Co. v. Superior Court (1995) 10 Cal.4th 257, 284 (Manufacturers Life) [a UCL claim] and Brown v. Kennard (2001) 94 Cal.App.4th 40, 49-50 (Brown) [abuse of process].) The privilege applies even if the statements were made with actual malice or with intent to do harm. (O’Keefe v. Kompa (2000) 84 Cal.App.4th 130, 135 (O’Keefe).)

The litigation privilege immunizes only communicative acts. (Rusheen, supra, 37 Cal.4th at p. 1058.) Whether conduct is communicative or noncommunicative turns on the gravamen of the action; that is, whether the injury resulted from an act that was communicative in its essential nature. (Ibid.)

In determining whether the litigation privilege applies, we must also be mindful of its broad-based and important purposes. “‘The principal purpose of [Civil Code] section [47, subdivision (b)] is to afford litigants and witnesses [citation] the utmost freedom of access to the courts without fear of being harassed subsequently by derivative tort actions.’” (Flatley, supra, 39 Cal.4th at p. 321; Silberg, supra, 50 Cal.3d at p. 213.) It places upon litigants the burden of exposing witness bias or the falsity of evidence in the proceeding in which it occurred, “‘thereby enhancing the finality of judgments and avoiding an unending roundelay of litigation, an evil far worse than an occasional unfair result.’” (Flatley, supra, at p. 322.) “For our justice system to function,” our Supreme Court has admonished, “it is necessary that litigants assume responsibility for the complete litigation of their cause during the proceedings.” (Silberg, supra, at p. 214.) In sum, “[g]iven the importance to our justice system of ensuring free access to the courts, promoting complete and truthful testimony, encouraging zealous advocacy, giving finality to judgments, and avoiding unending litigation, it is not surprising that section 47(2), the litigation privilege, has been referred to as ‘the backbone to an effective and smoothly operating judicial system.’” (Silberg, supra, at pp. 214-215.)

As our Supreme Court recently confirmed in Flatley, the litigation privilege applies even to such conduct as subornation of perjury because “‘it is in the nature of a statutory privilege that it must deny a civil recovery for immediate wrongs--sometimes even serious and troubling ones--in order to accomplish what the Legislature perceives as a greater good.’” (Flatley, supra, 39 Cal.4th at p. 324.) In Rusheen, the Supreme Court acknowledged that its expansion of the litigation privilege in the judgment enforcement context necessarily further narrowed the scope of the tort of abuse of process, but held that the result was consistent with modern public policy encouraging free access to the courts and finality of judgments by limiting derivative tort claims arising out of litigation-related misconduct. (Rusheen, supra, 37 Cal.4th at p. 1063.) An absolute litigation privilege is desirable “‘. . . not because we desire to protect the shady practitioner, but because we do not want the honest one to have to be concerned with [subsequent derivative] actions . . . .’ [Citation.]” (Id. at p. 1064.)

2. The Litigation Privilege Applies to the Conduct Alleged by Respondents

In the matter before us, the alleged wrongdoing was preparing and filing false declarations of service of complaints and summons, obtaining default judgments to which the conspirators were not entitled, and collecting on the judgments or using them to coerce settlements. There is no question that the activity alleged was made by or on behalf of litigants in a judicial proceeding. It is also clear that it was pursued in order to achieve the objects of the litigation and bore a connection to the action: the statements (false declarations, obtaining default judgments, collecting on the judgments) were made to accomplish the objectives of Elibrium I and Elibrium II, which were to collect the debt assigned to CTA by levy on the assets of Elibrium, Inc., Elibrium, LLC, Chiu, and Seelye. All of the wrongdoing for which Collectronics is alleged to be liable was designed to achieve that objective. As discussed ante, the fact that the conduct was fraudulent or malicious is immaterial to the application of the litigation privilege. (O’Keefe, supra, 84 Cal.App.4th at p. 134.)

The trial court nevertheless concluded that the litigation privilege did not apply because the conspirators’ wrongdoing consisted of noncommunicative acts rather than communicative conduct. We first consider the law at the time of the trial court’s decision, and then the subsequent ruling of our Supreme Court in Rusheen.

The filing of pleadings and declarations in litigation has long been deemed to be communicative conduct subject to the litigation privilege. (See Rubin v. Green (1993) 4 Cal.4th 1187, 1195-1196 (Rubin) [filing of pleadings is communicative]; Navellier v. Sletten (2003) 106 Cal.App.4th 763, 770 [“Pleadings and process in a case are generally viewed as privileged communications.”]; Pollock v. University of Southern California (2003) 112 Cal.App.4th 1416, 1431 [signing and filing of perjurious declaration in the course of litigation is communicative].) Furthermore, actions taken to collect on a judgment have generally been held to constitute communicative acts. (Brown, supra, 94 Cal.App.4th at pp. 49-50 [barring abuse of process claim based on bank levy pursuant to invalid judgment]; O’Keefe, supra, 84 Cal.App.4th at pp. 134-135 [barring abuse of process claim based on bank levy pursuant to fraudulent abstract of judgment]; Merlet v. Rizzo (1998) 64 Cal.App.4th 53, 64-66 [filing post-judgment motion for writ of sale].) Thus, all of the underlying wrongdoing of which Chiu and Seelye complained--filing false declarations of service, obtaining default judgments based on those declarations, and attempting to collect on the judgments--was subject to the litigation privilege under the weight of authority extant at the time of the trial court’s decision.^[9]

After the trial court’s decision and during the pendency of this appeal, our Supreme Court decided Rusheen, which not only confirmed that the filing of false declarations and obtaining default judgments thereon constituted communicative conduct subject to the litigation privilege, but also explained that even the act of levying pursuant to a judgment is subject to the privilege, if the gravamen of the complaint was the procurement of a default judgment based on allegedly false declarations of service. (Rusheen, supra, 37 Cal.4th at p. 1062.)

In Rusheen, as in the instant case, the plaintiffs obtained a default judgment against the defendant and levied on the judgment. (Rusheen, supra, 37 Cal.4th at pp. 1053-1054.) Defendant Rusheen brought a motion to vacate the default judgment, claiming he was never served. (Ibid.) The trial court denied the motion, finding that he had been served. On appeal, the default judgment was reversed and the matter remanded to the trial court, although the finding of effective service was not disturbed. (Id. at pp. 1054, 1062.) Rusheen then filed a cross-complaint against the plaintiff’s attorney (Cohen) for abuse of process, contending that Cohen had filed a false declaration of service, improperly took the default judgment, and permitted execution of the judgment. (Id. at p. 1054.) The trial court granted Cohen’s anti-SLAPP motion to strike Rusheen’s cross-complaint, finding that Rusheen had no reasonable probability of prevailing on his claims because Cohen’s alleged wrongdoing was privileged under Civil Code section 47. (Id. at p. 1054.) Rusheen appealed.

In rejecting Rusheen’s arguments, the Supreme Court reiterated that the communicative act of filing an allegedly false declaration of service of process fell within the litigation privilege. (Rusheen, supra, 37 Cal.4th at p. 1058.) The court then rejected the identical argument that respondents make here, that the gravamen of Rusheen’s action was a conspiracy to enforce a judgment obtained through the use of perjured declarations (culminating in a noncommunicative act of enforcing the judgment). (Id. at p. 1059.) Noting that a civil conspiracy does not give rise to a cause of action unless an independent civil wrong has been committed, the court found that the gravamen of Rusheen’s cross-complaint was procurement of a judgment based on allegedly false declarations of service, and Rusheen’s claim was thus barred by the litigation privilege. (Id. at p. 1062.)

In the matter before us, the clear gravamen of Chiu and Seelye’s complaint was that Collectronics and its coconspirators obtained default judgments based on fraudulent declarations of service. Chiu and Seelye argue that the true gravamen of their complaint was that Collectronics and the other conspirators perpetrated wrongdoing independent from filing false declarations of service, in that they engaged in a wrongful course of conduct to collect purported debts. Similarly, they contend that this course of conduct was not filing false declarations of service, but that the false declarations of service were merely evidence of the broader wrongful conduct. (See White v. Western Title Ins. Co. (1985) 40 Cal.3d 870, 888 [offers of compromise were evidence of prior course of tortious actions].) They also point to a finding by the trial court that “the underlying wrongful conduct is not perjury arising from the communication (allegedly committed by filing the essentially communicative declarations and proofs of service), but rather the conduct of failing to effect proper service, of which the declaration is evidence.”

This argument is not persuasive. Any compensable harm respondents suffered was the result of use of false declarations of service to obtain default judgments--not some broader scheme or course of conduct. (See Rusheen, supra, 37 Cal.4th at p. 1058 [gravamen of the action turns on the acts that allegedly resulted in injury].) All of the conspirators’ wrongful acts were communicative as defined by Rusheen.

Respondents’ other attempts to distinguish Rusheen are also unconvincing. First, they note that Rusheen did not involve a UCL claim. However, where, as here, the wrongful acts purportedly underlying a UCL claim are privileged, the UCL claim is precluded by the privilege as well. (Manufacturers Life, supra, 10 Cal.4th at p. 284 [UCL claim cannot be based on conduct that is absolutely privileged under, e.g., Civ. Code, § 47, subd. (b)]; Rubin, supra, 4 Cal.4th at pp. 1202-1203 [where conduct is within Civ. Code, § 47, subd. (b), it is absolutely immune from civil tort liability, including unfair competition claim]; Swanson v. St. John’s Regional Medical Center (2002) 97 Cal.App.4th 245, 249 [plaintiff cannot plead around the litigation privilege by relabeling the action a UCL claim].)

Next, respondents point out that Rusheen did not involve a conspiracy claim. (Rusheen’s conspiracy claim had been dismissed by the trial court.) Conspiracy is not an independent cause of action, however, but a doctrine of joint and several liability. (Applied Equipment Corp. v. Litton Saudi Arabia Ltd. (1994) 7 Cal.4th 503, 510-511.) Because civil conspiracy is not an independent tort, its only significance is that each member of the conspiracy may be held directly responsible as a joint tortfeasor, regardless of actual participation in the tortious act itself. (Mendoza v. Continental Sales Co. (2006) 140 Cal.App.4th 1395, 1406, fn. 7.) Since an independent unlawful act is required (Rusheen, supra, 37 Cal.4th at p. 1062), and because the purported conspiracy here is based on privileged conduct, no conspiracy liability can exist as a matter of law.

Lastly, respondents argue that Rusheen should not be applied here because equitable concerns militate against its retroactive application. Respondents acknowledge that judicial decisions are generally given retroactive effect. (Laird v. Blacker (1992) 2 Cal.4th 606, 620 (Laird).) An exception to this rule may arise depending on the extent to which the change in law was foreshadowed and foreseeable, and the extent of reliance upon the former law. (Barber v. State Personnel Bd. (1976) 18 Cal.3d 395, 400.) “In sum, ‘a court may decline to follow the standard rule when retroactive application of a decision would raise substantial concerns about the effects of the new rule on the general administration of justice, or would unfairly undermine the reasonable reliance of parties on the previously existing state of the law. In other words, courts have looked to the “hardships” imposed on parties by full retroactivity, permitting an exception only when the circumstances of a case draw it apart from the usual run of cases.’” (Laird, supra, at p. 620.) Seelye and Chiu contend that they relied on Drum and Kappel in filing their lawsuit, and they will be greatly harmed by reversal based on Rusheen because they will have no recourse for their injuries, and may further be liable for Collectronics’ attorney fees.

There is nothing in this case that draws it apart from ‘”the usual run of cases.’” (Laird, supra, 2 Cal.4th at p. 620.) In the first place, Rusheen did not introduce new law, but merely clarified existing law. Indeed, by the time respondents filed their complaint, there were authorities contrary to Drum and Kappel holding that acts taken to enforce a judgment were privileged, as well as ample authority that claims based on false declarations of service were privileged. When they initiated the lawsuit, they knew, or should have known, of the risk that they might be subject to a claim for its attorney fees under section 425.16, subdivision (c), if Collectronics’ conduct were found to be privileged.

Furthermore, the unavailability of an abuse of process claim or a UCL claim does not leave respondents entirely without recourse for Collectronics’ alleged wrongdoing. Respondents previously obtained an order setting aside the default judgment in Elibrium I (but later entered into a negotiated settlement of that case). The debt underlying Elibrium II was the same debt underlying Elibrium I. To the extent they incurred additional damages due to the alleged coconspirators’ conduct, redress could have been pursued in the underlying cases.^[10] In any event, the “‘salutary policy reasons for an absolute [litigation] privilege supersede individual litigants’ interests in recovering damages for injurious publications made during the course of judicial proceedings.’” (Rusheen, supra, 37 Cal.4th at p. 1064 [citing Silberg, supra, 50 Cal.3d at p. 218].)

In sum, the alleged wrongdoing of Collectronics is privileged under Civil Code section 47. Accordingly, Chiu and Seelye could not establish a reasonable probability of prevailing on their claims, and Collectronics’ motion to strike under section 425.16 should have been granted.

D. Mootness and Award of Attorney Fees

A defendant who prevails in moving to strike a complaint under section 425.16 is entitled to recover the attorney fees and costs it incurred in bringing the motion to strike. (§ 425.16, subd. (c).) This includes the right to recover such fees and costs incurred when prevailing as a respondent on appeal. (Wilkerson v. Sullivan (2002) 99 Cal.App.4th 443, 448; Evans v. Unkow (1995) 38 Cal.App.4th 1490, 1499-1500.)

Chiu and Seelye claim that, because they dismissed their complaint against Collectronics with prejudice during the pendency of this appeal, the appeal should be dismissed as moot. They further contend that, even if we entertain the appeal and reverse the trial court’s denial of the anti-SLAPP motion, they should not be required to pay attorney fees. We address each contention in turn.

1. Was There a Valid Dismissal in the Trial Court?

As a general matter, a plaintiff may voluntarily dismiss the complaint with or without prejudice upon request to the court clerk, prior to trial. (§ 581, subds. (b) & (c).) Once a notice of appeal has been filed in the trial court, however, section 916 provides for an automatic stay of trial court proceedings “upon the matters embraced” in or

“affected” by the appeal. Because the trial court proceedings were stayed upon Collectronics’ filing of its notice of appeal, the trial court lacked jurisdiction to dismiss the case thereafter. (Varian, supra, 35 Cal.4th at pp. 188-189 [trial court had no jurisdiction to proceed with trial and enter judgment after appeal filed from order denying anti-SLAPP motion to strike].)

Chiu and Seelye argue that Varian only precludes a trial court from taking action after the filing of an appeal, and here it was the clerk who performed a ministerial act in recording their request for dismissal. They provide no authority for this distinction. To the contrary, whether a matter is embraced in or affected by the appeal, and thus outside the jurisdiction of the trial court, turns not on whether the matter was handled by the clerk or the judge, but on whether it would have any bearing on the effectiveness of the appeal. (Varian, supra, 35 Cal.4th at p. 189.) Here, dismissing the case would impact the effectiveness of Collectronics’ appeal, at least to the extent that Collectronics contends that it should recover its attorney fees and costs as the prevailing party under section 425.16.

Because the trial court was without jurisdiction to dismiss the case during the pendency of the appeal, the dismissal is void on its face and cannot render the appeal moot.

2. The Dismissal, Even if Valid, Had No Effect on this Appeal

Even if the voluntary dismissal were valid, we would not be compelled to dismiss the appeal as moot. “A case is moot when [the decision of the reviewing] court can have no practical impact or provide the parties effectual relief.” (Woodward Park Homeowners Assn. v. Garreks, Inc. (2000) 77 Cal.App.4th 880, 888.) “‘When no effective relief can be granted, an appeal is moot and will be dismissed.’” (MHC Operating Limited Partnership v. City of San Jose (2003) 106 Cal.App.4th 204, 214.) As Collectronics argues, this court can grant effective relief, because if we reverse the denial of its motion to strike the complaint, Collectronics may also be entitled to an award of attorney fees and costs under section 425.16, subdivision (c).

3. Collectronics is Entitled to Recovery of Attorney Fees.

Assuming the truth of respondents’ allegations of wrongdoing, respondents present a compelling equitable argument that they should not be required to pay Collectronics’ attorney fees. The anti-SLAPP statute nevertheless mandates an award of attorney fees to a prevailing defendant. (§ 425.16, subd. (c); Ketchum v. Moses (2001) 24 Cal.4th 1122, 1131; Paulus, supra, 139 Cal.App.4th at pp. 685-686.)

Where a plaintiff dismisses his complaint after a motion to strike has been filed but before it is decided, the trial court must determine who would have prevailed on the motion and, if the defendant would have prevailed, award attorney fees. (Pfeiffer Venice Properties v. Bernard (2002) 101 Cal.App.4th 211, 218 (Pfeiffer); Liu v. Moore (1999) 69 Cal.App.4th 745, 748 (Liu); see Coltrain v. Shewalter (1998) 66 Cal.App.4th 94, 107 (Coltrain) [trial court has discretion].)

In this matter, however, Chiu and Seelye did not dismiss the action before the trial court ruled on the motion. We address, therefore, a somewhat different issue than that before the courts in Pfeiffer, Liu, and Coltrain: whether a defendant can recover attorney fees and costs pursuant to section 425.16, subdivision (c), where the plaintiffs prevailed against the anti-SLAPP motion in the trial court, but then attempted to dismiss the action before appellate reversal.

Had the trial court properly granted Collectronics’ motion to strike, respondents would have been liable for attorney fees and costs under section 425.16, subdivision (c). We see no basis for a different result, merely because the trial court erred and the successful result was not obtained until decision on appeal. Nor can respondents be insulated from liability by efforts to terminate the litigation after the decision in Rusheen issued. They attempted to dismiss the case at a time when the trial court had no jurisdiction, and they unsuccessfully attempted to dismiss this appeal. Those efforts neither terminated the proceedings nor compensated Collectronics for the attorney fees and costs incurred in bringing a meritorious motion. Accordingly, this matter must be remanded to the trial court for entry of a new order granting the motion to strike, and for further proceedings pursuant to section 425.16, subdivision (c).^[11] Any fee award must also consider appellate attorney fees. (Dowling v. Zimmerman (2001) 85 Cal.App.4th 1400, 1426.)

III. DISPOSITION

The order denying the motion to strike is reversed, and the matter is remanded for further proceedings consistent with this opinion.

BRUINIERS, J.^*

We concur.

JONES, P. J.

GEMELLO, J.

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^[1] Unless otherwise indicated all further section references are to the Code of Civil Procedure.

^[2] The other defendants brought motions to strike the complaint under section 425.16 as well. The trial court granted Provencher & Flatt and Douglas B. Provencher’s motion. The other motions were denied and are subject of appeal numbers A111392, A111393, and A111509.

^[3] As to the third cause of action to set aside the Elibrium II default, the motion was denied as moot because the parties stipulated that the cause of action did not apply to Collectronics.

^[4] The denial of an anti-SLAPP motion to strike under section 425.16 is immediately appealable. (§ 425.16, subd. (i).) Although Collectronics brought the motion under section 425.16 only, the trial court treated the motion as seeking relief under section 435 in part, due to Collectronic’s contention that its purported wrongdoing was protected under Civil Code section 47. The denial of a motion to strike under section 435 is not immediately appealable. (See § 904.1.) However, whether Collectronics’ alleged wrongdoing was subject to Civil Code section 47 is also germane to the motion brought under section 425.16, since Chiu and Seelye could not demonstrate a reasonable probability of prevailing on the merits if their claims were barred as a matter of law by the litigation privilege. (See Rusheen v. Cohen (2006) 37 Cal.4th 1048, 1065 (Rusheen).) We therefore consider the litigation privilege in our review of the denial of the motion under section 425.16.

^[5] In pertinent part, section 425.16 provides: “(b)(1) 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 or 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. (2) In making its determination, the court shall consider the pleadings, and supporting and opposing affidavits stating the facts upon which the liability or defense is based.” (§ 425.16, subd. (b)(1) & (2).)

^[6] As alleged in the complaint, the unfair or fraudulent business act or practice included violations of: “CCP §446 (requirement to verify pleadings); Penal Code §118 (perjury); Penal Code §127 (subornation of perjury); CCP §1209[(a)(4)] (contempt of court, including abuse of court processes); B&PC §6068 (attorneys’ duties to courts); and B&PC §6178(a) (deceiving courts and/or parties).” These violations, however, were based on the same actions underlying the abuse of process claim, including “knowingly and willfully pretending to serve summons and complaint, and then filing false [declarations of service],” “fraudulently obtaining default judgments,” and obtaining writs of execution and wrongfully levying on victims’ accounts.”

^[7] Seelye and Chiu also submitted as evidence an excerpt from a Court of Appeal decision in Norton v. Collectronics, Inc., et al. (A102715), reversing dismissal of Norton’s malicious prosecution action against Collectronics, CTA, Looney, and Becker. Norton had filed the malicious prosecution action in San Francisco County Superior Court (case No. 319513) after he prevailed in an earlier lawsuit brought by the collection agency in Alameda County Superior Court for a purportedly unpaid debt. The appellate court found that there was sufficient evidence that those defendants were involved in the prosecution of the Alameda action against Norton.

^[8] Seelye and Chiu contend that all of the evidence was admissible as an exception to the hearsay rule because the evidence shows habit or custom (People v. McPeters (1992) 2 Cal.4th 1148, 1178 [Evid. Code, § 1105, otherwise admissible evidence of habit or custom admissible to prove conduct in conformity with the habit or custom, where there was repeated instances of similar conduct sufficient to conclude there was a habit]) as well as plan or modus operandi (Pistorius v. Prudential Insurance Co. (1981) 123 Cal.App.3d 541, 556-557 [character evidence not inadmissible under Evid. Code, § 1101, if it is relevant to prove a fact such as motive, opportunity, intent, plan, knowledge, identity, or absence of mistake or accident]). Neither Evidence Code section deals at all with hearsay.

^[9] In the trial court, respondents relied on Drum v. Bleau, Fox & Associates (2003) 107 Cal.App.4th 1009 (Drum). In Drum, the court held that the litigation privilege did not bar claims for damages caused by the defendants’ levy on real property pursuant to a writ of execution, because the act of the levy was not a communication. The court explained that although the preparation, filing, and serving of a judgment, as well as the application for a writ of execution and instructions to the levying officer, are all communicative, a noncommunicative act occurs “when the levying officer, on behalf of the judgment creditor, actually levies on the property.” (Id. at p. 1026.) In the matter before us, Chiu and Seelye did not contend that Collectronics was liable for the wrongful levy on their property, so Drum was inapposite. In any event, our Supreme Court disapproved Drum in Rusheen, to the extent inconsistent with its opinion. (Rusheen, supra, 37 Cal.3d at pp. 1060-1065.)

^[10] Further, the purported wrongdoing of the conspirators may be addressed by other means. As the court in Rusheen recognized, the litigation privilege did not bar respondents from seeking sanctions in the underlying actions, and does not bar criminal prosecutions for perjury. (Rusheen, supra, 37 Cal.4th at pp. 1063, 1065.) While we conclude that respondents cannot maintain a UCL claim, we do not opine as to whether a governmental agency could do so.

^[11] The amount of mandatory attorney fees awarded to a defendant who successfully brings an anti-SLAPP motion is within the discretion of the trial court. (Paulus, supra, 139 Cal.App.4th at p. 686.)

^* Judge of the Superior Court of Contra Costa County, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.