Matthews v. Reardon

Filed 8/28/07 Matthews v. Reardon CA2/4

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION FOUR

APPEAL from a judgment of the Superior Court of Los Angeles County, Alexander H. Williams, Judge. Affirmed.

Robert Matthews, in pro. per., for Plaintiff and Appellant.

Klinedinst Law, G. Dale Britton, Greg A Garbacz, Scott O. Luskin; Schwartz & Schwartz, Michael Schwartz and Kevin O. Schwartz for Defendants and Respondents.

______________________

Robert Matthews appeals from the judgment dismissing his action following the granting of respondents special motion to strike. We find no error and affirm the order.

FACTUAL AND PROCEDURAL SUMMARY

Appellant Robert Matthews was the sole trustee of the Paul H. Waigner Trust from the time of Waigners death in January 2001 through December 2002.

Trust beneficiary Betty Reardon petitioned the probate court to remove Matthews as trustee and surcharge him for his wrongful conduct as trustee (LASC No. BP077036). Reardon was represented by attorney Michael Schwartz. Reardon obtained an ex parte order, dated January 2, 2003, temporarily suspending appellant as trustee and ordering him to surrender all trust property to Reardon, who was appointed temporary trustee. Schwartz notified Merrill Lynch, holder of the trust accounts, of the courts order.

On appellants motion, the court set aside the January 2 order in early February 2003, and set the petition for appointment of temporary trustee for a hearing on February 24. Appellant was ordered not to distribute any funds in any capacity pending the hearing. Schwartz notified Merrill Lynch of the change in order.

After several continuances, the matter was tried in February 2004. The court found that [b]y claiming to have expended a clearly unconscionable amount of time fulfilling his obligations as trustee and accountant and paying himself well more than twice the amount of fair, just and equitable compensation, Matthews failed to administer the Trust in accordance with its terms and acted both with gross negligence and with reckless indifference to the interest of the Trusts beneficiaries. Moreover, given the overwhelming discrepancy between the compensation Matthews paid himself and the amount to which he reasonably was entitled, to the extent Matthews relied on the advice of counsel in spending the unconscionable amount of time or paying himself inequitable fees, Matthews necessarily was not acting in good faith. By order dated April 5, 2004, appellant was surcharged in the sum of $203,971.80, ordered to pay Reardons costs, and removed as trustee; Reardon was appointed successor trustee.

On January 5, 2004, before the trial in the probate action, appellant, individually and on behalf of the trust, filed this civil action against Reardon and Schwartz (respondents) for tortious interference with contractual and business relationships, theft by deception, defamation, tortious interference in the administration of a trust, and conversion. On February 9, 2004, appellant filed the proof of service of summons as to both respondents. Neither filed responsive pleadings, and their defaults were entered on April 19, 2004.

On May 21, 2004, respondents moved to vacate their defaults, asserting they had not been served with the summons and complaint. Matthews opposed the motions with declarations from his process servers. The trial court granted relief from default and gave respondents 30 days to respond to the complaint.

Respondents brought a special motion to strike the complaint under Code of Civil Procedure section 425.16.^[1] They asserted the causes of action in appellants complaint arose from statements they made in connection with the probate case to have appellant removed as trustee, and thus fell within the scope of the Anti-SLAPP statute. They also asserted appellant could not show that he would prevail in the case. The trial court agreed and granted the special motion to strike. Appellant challenges the orders vacating respondents defaults and striking his complaint.

DISCUSSION

I

Appellant claims the court erred in setting aside respondents defaults because their moving papers contained deliberate, intentional misrepresentations, untruths, half-truths, and deceitfully misleading affidavits, arguments and declarations on the part of the Defendants . . . . The trial court evaluated the evidence differently, and we find its view well supported.

[C]ompliance with the statutory procedures for service of process is essential to establish personal jurisdiction. [Citation.] Thus, a default judgment entered against a defendant who was not served with a summons in the manner prescribed by statute is void. (Dill v. Berquist Construction Co. (1994) 24 Cal.App.4th 1426, 1444.) Under section 473, subdivision (d), the court may set aside a default judgment which is valid on its face, but void, as a matter of law, due to improper service. (Ellard v. Conway (2001) 94 Cal.App.4th 540, 544.)

Section 415.10 provides: A summons may be served by personal delivery of a copy of the summons and of the complaint to the person to be served. Service of a summons in this manner is deemed complete at the time of such delivery. Substitute service in lieu of personal delivery is authorized by section 415.20, subdivision (b), only if the summons and complaint cannot with reasonable diligence be personally delivered to the person to be served . . . . In seeking entry of respondents defaults, appellant relied on personal service, not substitute service. Appellant filed a proof of service completed by Archie Johnson, Jr., which stated he had served Michael Schwartz with the summons, complaint, and other documents at 1746F S. Victoria Avenue #393, Ventura, California 93003 by personally delivering the copies to Schwartz on January 30, 2004 at 2:24 p.m.

In his motion for relief from default, Schwartz claimed he had not been personally served with the summons and complaint in the action. Schwartz submitted a declaration stating that his law firm uses a private mailbox company located at 1746F S. Victoria Avenue, Ventura, California 93003 as its mailing address. It would be physically impossible for anyone to have served me at 1746F S. Victoria Ave. #393 because #393 is nothing more than a small (approx. 6 x 15 x 18) mailbox.

In opposition, appellant submitted the declaration of Archie Johnson, Jr., stating that on January 24, 2004 at approximately 7:24 p.m., he attempted to serve process on Schwartz at the Victoria Avenue address. Upon my arrival I discovered this address to be a UPS store. After my discovery this address was a UPS store, I elected to contact Thomas Lack to report my discovery and request that he conduct locate on Michael Schwartz. He continued: On January 30, 2004 Thomas and Associates reported a new address to me for Michael Schwartz. On that same day at approximately 2:42PM, I served Mr. Schwartz at the following address: 5681 Larkin Street, Ventura, CA 93003. A man opened the door looking as if he was expecting me. I asked for Mr. Schwartz and he responded by saying, let me have the papers. I gave him a copy of the papers and proceeded to leave the location. Johnson concluded his declaration with an apology for any confusion the original proof of service had caused.

In ruling on the motion for relief, the court had before it an admission by Johnson that he had prepared and signed an untruthful proof of service, a statement by Johnson that he had delivered the papers to [a] man at the Larkin Street address, and a denial by Schwartz that he had been personally served. On this conflicting evidence, the trial court could reasonably conclude that there had not been compliance with the statutory procedures for service of process necessary to establish personal jurisdiction. The court did not abuse its discretion in granting Schwartz relief from default.

In her motion for relief, Reardon stated she had never been served with the summons and complaint, and that the proof of service filed with the court was fraudulent. According to her declaration, On the morning of January 26, 2004, I opened my front door to get the newspaper. I found a one-page document on the front porch, the summons (but not the complaint) in this action. It apparently had been left there sometime the day before, January 25. I know this because I invariably open my front door to get the newspaper each morning, and it was not there the morning of January 25. She disputed the assertion of appellants process server that she was personally served with documents: Indeed, I believe I was visiting my son Gavin the evening of January 24, and I was visiting friends the evening of January 25.

In opposition to the motion, appellant submitted the declaration of Johnson, who stated: On January 24, 2004 at approximately 10:39PM, service of process was executed personally on Defendant Betty Reardon at her Sherman Oaks address. After I executed personal service on Ms. Reardon, she asked me if I had served Mr. Schwartz. My response was that we are in the process of serving him. On this occasion another person who can verify that I did indeed serve Ms. Reardon personally accompanied me.

Reardon submitted a declaration in response, again stating she was not served personally with any documents. She reiterated that she believed she was visiting her son the evening of January 24, and that on January 25, she spent the evening with friends, from approximately 4:00 p.m. until almost midnight. Upon returning home, she parked her car behind the house and entered through the back door. Because I am a woman, 62 years old and living alone, and concerned about my personal safety, I only answer the front door after first identifying visitors through the peek-hole. Unless I can confirm that visitors are known to me as friends or family, I do not answer the door after dark, ever. Reardon disputed Johnsons claim of serving her at 10:39 at night: Mr. Johnson claims to have personally handed the summons and complaint to me. This is not true. I do not leave my front porch light on at night when I am home alone, and I never would [] have opened the front door to meet with Mr. Johnson at almost 11:00 p.m. on a Saturday night. Instead, I would have told a stranger such as Mr. Johnson to leave, without engaging him in conversation as he claims, or I would have called 9 1 1 to report a police emergency. Reardon said it was even more unthinkable that she would have opened the front door if two strangers had appeared on her dark front porch, as Johnson claimed.

We presume in favor of the trial courts order, and indulge all reasonable inferences in favor of its correctness. (State Farm Fire & Casualty Co. v. Pietak (2001) 90 Cal.App.4th 600, 608.) Viewing the evidence in accordance with this standard, we find sufficient evidence to support the conclusion that appellant had not effected personal service on Reardon, nor otherwise complied with the statutory requirements for service of process on Reardon. The courts decision to grant Schwartz and Reardon relief from default was not an abuse of discretion.

The defaults also were defective based on appellants lack of standing to act on behalf of the trust. He was permanently removed as trustee on April 5, 2004. His request for entry of default on behalf of the trust was made on April 19, 2004, at a time when he was no longer the trustee. Reardon, as trustee, did not ratify the request for entry of default against her and her attorney. Since appellant had no standing to request entry of default on behalf of the trust, the defaults entered pursuant to his request were void, and the court properly granted relief from default pursuant to section 473, subdivision (d).

II

Appellant also claims the court erred in granting the special motion to strike under section 425.16, the anti-SLAPP statute (strategic lawsuit against public participation).^[2] 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 persons 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. Subdivision (e) defines an act in furtherance of a persons right of petition or free speech to include any written or oral statement or writing made before a . . . judicial proceeding, or any written or oral statement or writing made in connection with an issue under consideration or review by a . . . judicial body, and any other conduct in furtherance of the exercise of the constitutional right of petition . . . .

The court engages in a two-step process to determine whether to grant a special motion to strike: First, the court decides whether the defendant has made a threshold showing that the challenged cause of action is one arising from protected activity. . . . 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. (Equilon Enterprises v. Consumer Cause, Inc. (2002) 29 Cal.4th 53, 67.)

As background, appellant alleged that Reardon sought and obtained an ex parte Order removing appellant as trustee by misrepresenting facts to the issuing judge, and that she caused Schwartz to file a scurrilous and false Petition claiming appellant had misappropriated trust funds. After obtaining the ex parte order, respondents allegedly informed Merrill Lynch to direct all trust communications, including account statements, to Reardon, not to appellant. Respondents allegedly did not inform Merrill Lynch that appellant was reinstated as trustee. These allegations all arise from written and oral communications directly related to Reardons petition for removal of trustee in the probate case, and thus fall within the purview of section 425.16.

Appellants first cause of action, for tortious interference with contractual and business relationships, is premised on respondents intercepting or diverting the Merrill Lynch account statements. The second cause of action is labeled Theft by Deception. Appellant alleged that respondents deceived Merrill Lynch into falsely believing that appellant was no longer the trustee and that Reardon had replaced him. Respondents action of diverting the trust account statements from appellant to themselves allegedly constituted a theft of those documents by deception. These causes of action are premised on statements made to Merrill Lynch by respondents in connection with the then pending petition for removal of trustee in the probate court. These are acts in furtherance of respondents rights of petition within the meaning of section 425.16.

The third cause of action is for defamation. Appellant alleged that throughout the administration of the trust, Reardon made derogatory and defamatory statements about appellant, including the false allegation that appellant stole money from the trust. The claim that appellant wrongfully took money from the trust was at the heart of Reardons petition to replace appellant as trustee. Section 425.16, subdivision (e), applies to communications made in connection with an issue under consideration by a judicial body, including communications leading up to that judicial review. (See Braun v. Chronicle Publishing Co. (1997) 52 Cal.App.4th 1036, 1048-1049.)

The fourth cause of action for tortious interference in the administration of a trust, and the fifth cause of action for conversion, are based on the same facts in the preceding causes of action. For the same reasons already discussed, these causes of action are subject to section 425.16.

Respondents having made the threshold showing that appellants action arises from acts in furtherance of their rights of petition and free speech, the burden shifted to appellant to demonstrate a probability of prevailing on his claims. (Equilon Enterprises v. Consumer Cause, Inc., supra, 29 Cal.4th at p. 67.) Appellant did not, and cannot, meet this burden because the litigation privilege provides respondents with a complete defense to the action.

The litigation privilege, codified in Civil Code section 47, applies to any communication (1) made in judicial or quasi-judicial proceedings; (2) by litigants or other participants authorized by law; (3) to achieve the objects of the litigation; and (4) that have some connection or logical relation to the action. (Silberg v. Anderson (1990) 50 Cal.3d 205, 212.) The privilege is not limited to statements made during a trial or other proceedings, but may extend to steps taken prior thereto, or afterwards. (Rusheen v. Cohen (2006) 37 Cal.4th 1048, 1057.) The litigation privilege protects only publications and communications, and the key in determining whether the privilege applies is whether the injury allegedly resulted from an act that was communicative in its essential nature. (Rusheen, supra, at p. 1058.)

According to the complaint, Reardon made statements regarding appellants improper handling of the trust; she, through her attorney Schwartz, filed a petition in the probate court to have appellant removed as trustee based on this improper handling of the trust; Schwartz sent a letter to Merrill Lynch advising the firm of the actions of the probate court; and as a result of this communication, Merrill Lynch sent the account statements to Reardon, not to appellant. All of the actions which form the basis of appellants complaint are communicative in nature, and relate to the probate litigation. The litigation privilege provides respondents with a complete defense to the action. Thus, appellant cannot demonstrate the likelihood that he will prevail in the action. The court properly granted respondents special motion to strike.

DISPOSITION

The judgment is affirmed. Respondents are to have their costs on appeal.

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS.

EPSTEIN, P. J.

We concur:

WILLHITE, J.

SUZUKAWA, J.

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^[1] Statutory references are to the Code of Civil Procedure unless otherwise specified.

^[2] Appellant also claims the special motion to strike was untimely. As we have explained, the earlier purported service of process was found improper. The complaint was ultimately served by mail on October 20, 2004. The special motions to strike were filed on November 16, 2004, well within the 60-day limit prescribed by section 425.16, subdivision (f).