Reed v. Taye CA1/4
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NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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
FIRST APPELLATE DISTRICT
DIVISION FOUR
CAROL VERES REED,
Plaintiff and Appellant,
v.
FESSHA TAYE et al.,
Defendants and Respondents.
A145057
(Alameda County
Super. Ct. No. RG14734409)
I. INTRODUCTION
Carol Reed (Reed) appeals from six separate orders issued by the trial court in her action for breach of contract, malicious prosecution, and abuse of process filed against respondents, Fessha Taye (Taye), Daniel Murphy (Murphy), and Burnham Brown. Three of the appealed orders grant respondents’ respective motions to strike Reed’s complaint pursuant to section 425.16 of the Code of Civil Procedure, this state’s anti-SLAPP statute. The fourth appealed order is a denial of Reed’s motion to be relieved of dismissal due to a mistake relating to her opposition to the anti-SLAPP motions. Finally, Reed appeals two orders granting attorney fees to Taye and Murphy.
We conclude that the trial court did not commit reversible error in its decisions to grant each of the three special motions to strike, or in denying the motion to be relieved of dismissal. Reed does not advance any independent argument with respect to the two attorney fee orders, which were unopposed in the trial court. Therefore, we affirm the attorney fee orders along with the substantive orders to which they relate.
II. STATEMENT OF FACTS
A. Prior Litigation
Reed’s complaint in the present case arises out of events that occurred during protracted litigation of a 2006 lawsuit that Taye filed in his capacity as the conservator of Ida McQueen against Reed and others. Detailed accounts of the facts and procedural history of the McQueen litigation are set forth in multiple appellate court decisions. (See, e.g., Conservatorship of McQueen (Mar. 14, 2011, A126825 [nonpub. opn.]) (McQueen I)); Conservatorship of McQueen (Jan. 7, 2013, A134337 [nonpub. opn.], affd. in part & revd. in part by Conservatorship of McQueen (2014) 59 Cal.4th 602) (McQueen II).) Here, we briefly summarize the pertinent facts and events.
Ida McQueen, a physically and mentally disabled elder, was the beneficiary of a testamentary trust established by her late father, which gave her the right to live in the family’s Oakland home and receive trust income during her lifetime (the trust). Reed, an attorney for the family, helped create the trust. In 2000, McQueen left her home to obtain care at a skilled nursing facility and then moved into a community care facility. Reed went to that facility and “obtained McQueen’s mark on a power of attorney in favor of McQueen’s sister.” Thereafter, McQueen’s uncle, who was trustee of the trust, sold the Oakland home without McQueen’s knowledge or consent, and Reed distributed the proceeds of the sale “to various members of McQueen’s family, but McQueen herself received nothing.”
In 2005, Taye was appointed as McQueen’s conservator, and the following year he filed suit against Reed and others. A jury found that Reed committed a breach of fiduciary duty, conversion, and elder abuse. A September 2009 judgment held Reed and two other defendants liable for McQueen’s damages in the amount of $99,900. Reed, the only defendant found liable for elder abuse, was also ordered to pay Taye prejudgment attorney fees and costs totaling more than $300,000. Reed filed an appeal from the judgment in this court (McQueen I).
In December 2009, while McQueen I was pending, Taye filed a separate action against Reed and several of her relatives (the fraudulent transfer action). Taye alleged that Reed and her husband transferred parcels of real property to their relatives in an attempt to avoid payment of the judgment. In May 2010, the fraudulent transfer action was settled pursuant to an agreement that Taye would voluntarily dismiss the action and defendants would transfer a specified parcel of property back to Reed (the May 2010 Settlement Agreement).
In March 2011, this court filed our decision in McQueen I, affirming the judgment against Reed. On June 8, the Supreme Court denied review, and the remittitur issued on June 15, 2011. Thereafter, on July 15, 2011, Reed satisfied the trial court judgment.
On July 25, 2011, Taye filed a motion to recover fees and costs that he incurred during the appeal of McQueen I and the prosecution of the fraudulent transfer action (the July 2011 fee motion). The trial court awarded Taye $56,974.50, rejecting Reed’s argument that her satisfaction of the underlying judgment cut off Taye’s right to seek fees. On appeal, this court reversed the trial court order, holding that the July 2011 fee motion was untimely under section 685.080, subdivision (a), the Enforcement of Judgments Law (EJL). On July 7, 2014, the Supreme Court partially reversed our decision (McQueen II). The McQueen II court held that the EJL time restriction applied to fees incurred to prosecute the fraudulent transfer action, but did not apply to fees incurred during the appeal of the judgment in McQueen I. The court remanded the case for a numerical division of fees into these categories and to address other issues pertaining to proper calculation of a fee award limited to fees incurred during the appeal.
B. Reed’s Complaint in the Present Action
On July 25, 2014, Reed filed the current action for breach of contract, abuse of process, and malicious prosecution against Taye in his capacity as conservator of McQueen’s estate, and against Murphy and Burnham Brown, Taye’s attorneys in the McQueen litigation. Reed refined her claims in a first amended complaint (FAC) filed the following month. All three causes of causes of action were premised on allegations that respondents’ pursuit of the July 2011 fee motion violated the May 2010 Settlement Agreement.
According to the FAC allegations, respondents were liable for breaching two separate provisions in the May 2010 Settlement Agreement. First, Reed alleged that filing the July 2011 fee motion constituted a breach of a provision in the May 2010 Settlement Agreement requiring each party to bear its own fees and costs in the fraudulent transfer action (the attorney fee provision). Second, Reed alleged that Murphy violated another provision requiring the parties to keep the terms of the settlement confidential (the confidentiality clause) because he discussed the terms of the settlement in court filings associated with the July 2011 fee motion. Reed further alleged that these two claimed breaches of the May 2010 Settlement Agreement also constituted malicious prosecution and an abuse of process because they were designed to gain improper advantage in the McQueen litigation.
C. Murphy’s Special Motion to Strike
1. Murphy’s Motion and Evidence
On January 2, 2015, Murphy filed a special motion to strike the FAC pursuant to the anti-SLAPP statute. (§ 425.16.) Murphy argued that all of the claims against him arose out of constitutionally protected petitioning activities he engaged in while representing Taye, and that Reed could not establish a prima facie case for any of her causes of action because the litigation privilege (Civ. Code, § 47, subd. (b)) barred her causes of action for breach of contract and abuse of process, and there was no evidence to substantiate the malicious prosecution claim.
In support of his motion, Murphy filed a declaration outlining the history of the McQueen litigation and requesting that the court take judicial notice of the complaint and trial court judgment in McQueen I, and the complaint and May 2010 Settlement Agreement in the fraudulent transfer action.
The May 2010 Settlement Agreement, which was attached as an exhibit to Murphy’s declaration, was signed by Reed, Murphy, and an attorney from Burnham Brown. A prefatory section outlined the following background facts: Acting in their capacity as attorneys for conservator Taye, Murphy and Burnham Brown filed the fraudulent transfer action against Reed, her husband James Reed, and two of their children; the parties anticipated that it would “be some time” before the appeal in McQueen I was “determined”; and the parties shared a “wish” to dismiss the fraudulent transfer action without prejudice and to “agree upon terms that will govern their relationship pending the determination of said appeal.”
The material terms of the May 2010 Settlement Agreement were that Taye would dismiss the fraudulent conveyance action without prejudice, and withdraw any lis pendens associated with the case; Reed’s family members would transfer a specific parcel of property back to Reed so that she would be the sole record owner of title to that property; Reed’s husband, James Reed, would guarantee up to $200,000 of the judgment against Reed that was on appeal in McQueen I; and, with one exception, Reed and James Reed would not encumber or sell any of their real property assets.
As noted above, the FAC alleged that respondents breached two provisions in the May 2010 Settlement Agreement, the attorney fee provision and the confidentiality clause. The attorney fee provision stated: “5. Solely for purposes of this Agreement governing the period of time until the [McQueen I] appeal is completed, DEFENDANT and PLAINTIFF shall be responsible for paying their own attorney fees and costs relating to the [fraudulent transfer action]. In the event that the lawsuit is refiled, this Agreement shall not restrict in any way PLAINTIFF or DEFENDANT seeking an award of attorney[] fees and costs.” (Original capitalization.)
The confidentiality clause stated: “7. DEFENDANT and PLAINTIFF agree on behalf of themselves, their employees, agents, attorneys and all other persons to whom they have conveyed information about [the fraudulent transfer action], that they will keep the contents of this Settlement Agreement confidential as well as all correspondence and declarations exchanged between the parties or their attorneys relating to the negotiation of this Settlement Agreement. If a court order is sought by anyone to release this confidential information, the party from whom the information is sought shall forthwith notify the other party to this Agreement so that such party may intervene in the proceedings and shall continue to keep this information confidential until otherwise ordered by a court having proper jurisdiction.” (Original capitalization.)
2. Reed’s Opposition and Evidence
Reed opposed the special motion to strike on the alternative grounds that (1) Murphy’s conduct was not protected by the anti-SLAPP statute because he bargained away his constitutional right to engage in petitioning activities by personally signing the May 2010 Settlement Agreement; and (2) Reed could “easily show that she has a reasonable probability of success in this action.” On this second point, Reed argued as follows: the FAC “is based entirely on defendants’ breach of the [May 2010] [S]ettlement [A]greement by seeking contractually prohibited attorney fees and disclosing confidential information. However, in this particular case, the means by which defendants breached the contract was by the improper use of a legal process.”
Reed also filed a declaration by her counsel (and husband) James Reed. James Reed requested that the court take judicial notice of the two appellate court decisions in McQueen II (which we discussed above). James Reed also sought judicial notice of an appellate brief that Murphy filed in September 2012 on behalf of Taye in response to Reed’s appeal from the order granting the July 2011 fee motion (the 2012 Respondent’s Brief). James Reed stated that the 2012 Respondent’s Brief was attached to his declaration as Exhibit 3, but it was actually attached as Exhibit 1.
The 2012 Respondent’s Brief contained a background section that discussed the fact that Taye’s fraudulent transfer action had been settled and also disclosed that “Reed offered to transfer the property back in exchange for a dismissal . . . , to which [Taye] agreed.” In a footnote to this discussion, Taye’s appellate counsel (i.e., Murphy) pointed out that Reed had overlooked a potential defense to the fee motion. That footnote stated: “Reed seems to have entirely missed the argument that the [May 2010 Settlement Agreement] signed to obtain the dismissal of the Fraudulent Transfers lawsuit contains a paragraph [paragraph 5] stating that all parties are responsible for their own attorney[] fees and costs related to the second lawsuit. However, that argument is now effectively waived since Reed failed to bring it up in her written opposition or in her oral argument at either of the two hearings on Respondent’s Motion for Fees and Costs in the trial court.”
3. The Order Granting Murphy’s Motion to Strike
After conducting a hearing on February 27, the trial court granted Murphy’s special motion to strike Reed’s claims as alleged against him. The court found that Murphy had established that the conduct challenged in the FAC was protected activity, and thus the burden shifted to Reed to show a probability of success on the merits of her claims. (See § 425.16, subd. (b).) The court then found that Reed’s evidentiary showing was insufficient to carry that burden, making specific findings with respect to each cause of action.
Preliminarily, the court found that the litigation privilege (Civ. Code, § 47, subd. (b)) did not bar Reed’s breach of contract claim, as Murphy had argued. (Citing Navellier v. Sletten (2003) 106 Cal.App.4th 763, 773 774.) However, the court also found that Reed failed to provide evidentiary support for that claim. According to the court, there was no admissible evidence that Murphy breached the confidentiality clause. Furthermore, evidence that was before the court was inconsistent with Reed’s claim that the attorney fee provision was breached because it established the following facts: by its terms, the attorney fee provision only applied until the appeal in McQueen I was completed; that appeal was completed no later than June 2011; and the July 2011 attorney fee motion was filed the following month on July 25.
The court also found that Reed failed to produce evidence to support several elements of her two other causes of action. The malicious prosecution claim was not supported by any evidence that the July 2011 fee motion was terminated in Reed’s favor; filed without probable cause; or filed with malice. (See Crowley v. Katleman (1994) 8 Cal.4th 666, 686; Zamos v. Stroud (2004) 32 Cal.4th 958, 970; HMS Capital, Inc. Lawyers Title Co. (2004) 118 Cal.App.4th 204, 218.) Furthermore, Reed’s abuse of process claim was unsupported because the act of filing the July 2011 fee motion fell squarely within the litigation privilege, and there was no evidence that act was undertaken with an ulterior motive or that it was not proper in the regular conduct of the proceedings. (See Rusheen v. Cohen (2006) 37 Cal.4th 1048, 1057.)
In reaching these conclusions, the court “observe[d]” that the declaration of James Reed stated that the 2012 Respondent’s Brief was attached as Exhibit 3, but that Exhibit 3 was actually a copy of a February 2013 appellate decision in the McQueen litigation. In light of this fact, the court stated: “Reed did not file Respondent’s appellate brief from the second appeal with the Court, and therefore the Court has not considered it.”
Pursuant to these findings, the court granted Murphy’s special motion to strike and dismissed him from the action.
4. Denial of Motion for Relief from Dismissal Due to Mistake
On March 16, Reed filed a “Motion for Relief from Dismissal Through Mistake.” There were two parts to this motion. First, Reed sought relief from James Reed’s mistake in attaching the wrong exhibit to his original declaration filed in opposition to Murphy’s motion. Second, to the extent that the missing exhibit was not the only reason that Murphy’s motion was granted, Reed requested that the court consider additional argument and authorities in support of Reed’s opposition to that motion.
Reed also filed another declaration by James Reed. In his second declaration, James Reed stated: “Through my mistake, the wrong Exhibit 3 was attached and critical evidence was not produced as intended. As a consequence, the Court dismissed defendant [Murphy].” James Reed attached another copy of the 2012 Respondent’s Brief as Exhibit 3 and requested that the court take judicial notice of it.
Aside from explaining his mistake with respect to the identification of exhibits, James Reed also advanced new legal and factual arguments in an effort to fill evidentiary voids outlined by the trial court in the February 27 order granting Murphy’s special motion to strike. Pertinent here, James Reed opined that the contract language used in the attorney fee provision was “meant” to “prohibit” both sides from seeking fees arising out of the fraudulent conveyance action that was being dismissed, but also to authorize an attorney fee recovery in a subsequent fraudulent transfer action if it became necessary to file such an action in order to satisfy the underlying judgment after McQueen I was finally resolved. Thus, according to James Reed, the filing of the July 2011 fee motion constituted a breach of the attorney fee provision.
In his second declaration, James Reed also described a conversation he had with Reed when the July 2011 fee motion was pending in the trial court. James Reed recalled that he and Reed made a decision that if the court ruled in Taye’s favor, they would file an appeal only if the fee award included fees incurred during the fraudulent transfer action.
On April 14, the trial court held a hearing and then denied Reed’s motion to be relieved from dismissal due to mistake. The court granted Reed limited relief, in that it considered the 2012 Respondent’s Brief in deciding the merits of Murphy’s anti-SLAPP motion. However, the court stated that it would not consider other new information included in the second declaration of James Reed because Reed had failed to show that the information could not have been presented earlier when Reed’s opposition to the motion was filed. Furthermore, after considering the 2012 Respondent’s Brief, the court affirmed its February 27 order granting Murphy’s special motion to strike.
In affirming its prior finding that conduct alleged in the FAC was protected activity, the court rejected Reed’s new theory that the conduct she challenged was illegal as a matter of law. The court then went on to hold that Reed had failed to satisfy her burden of showing a probability of prevailing on any of the three causes of action alleged against Murphy in the FAC, “even considering Murphy’s respondent’s brief in the prior appeal.” Although the court repeated many of the findings and conclusions set forth in its February 27 order, it also made some additional findings, including that “while the terms of the settlement agreement may perhaps provide a defense to a fee motion, no language in the settlement agreement suggests that filing a fee motion would constitute a breach of the settlement agreement.”
5. The Murphy Attorney Fee Order
On April 21, the trial court granted an unopposed motion by Murphy to recover his attorney fees pursuant to section 425.16, subdivision (c). The court awarded Murphy fees totaling $25,161.50 and $495 in costs for counsel’s work in making and pursuing a disposition by way of the anti-SLAPP motion.
D. Burnham Brown’s Special Motion to Strike
On March 19, while Reed’s motion for relief from dismissal due to mistake was still pending, Burnham Brown filed its special motion to strike under section 425.16. In her opposition, Reed argued, among other things, that Burnham Brown not only breached a promise to refrain from seeking fees incurred in the fraudulent transfer action, but it was also liable for co-counsel Murphy’s alleged breach of the confidentiality clause.
The trial court held a hearing on Burnham Brown’s special motion to strike on April 14, at the same time it heard Reed’s motion for relief from dismissal through mistake. In a separate order filed that day, the court granted Burnham Brown’s motion. As it had in its previous orders pertaining to Murphy, the court found that Burnham Brown established that the conduct alleged in the FAC was protected petitioning activity and rejected Reed’s contention that the challenged actions were illegal as a matter of law. Thus, the evidentiary burden shifted to Reed and, once again, the court concluded that Reed failed to carry that burden, making essentially the same findings and conclusions that were set forth in its prior orders. Accordingly, the court dismissed Burnham Brown from the action.
E. Taye’s Special Motion to Strike
On April 8, before the court ruled on either Reed’s motion for relief from dismissal or Burnham Brown’s special motion to strike, Taye filed his own special motion to strike under section 425.16. Reed filed her opposition on April 29. The motion came on for hearing on May 8, but no party contested the tentative ruling published by the court before the hearing. The court then granted Taye’s motion to strike, employing similar rationales as it did in deciding the two earlier special motions to strike under the anti-SLAPP law. Pursuant to these findings, the court dismissed Taye from the action.
F. Reed’s Notices of Appeal
On May 5, Reed filed a notice of appeal from (1) the February 27 order granting Murphy’s special motion strike; (2) the April 14 order regarding Reed’s motion to be relieved of mistake; (3) the April 14 order granting Burnham Brown’s special motion to strike; and (4) the April 21 order granting Murphy’s motion for attorney fees. On May 22, Reed filed an amended notice of appeal in which she added the May 8 order granting Taye’s special motion to strike to her list of challenged orders. Finally, on September 22, Reed filed a second amended notice of appeal adding a sixth order to her appeal—a July 28 order granting Taye’s motion for attorney fees.
As noted in our Introduction, Reed does not address either attorney fee order in her appellate briefs. Thus, we limit our discussion to the substantive rulings that resulted in the orders granting respondents’ special motions to strike.
III. DISCUSSION
A. Statutory Overview and Standard of Review
Section 425.16, subdivision (b)(1) provides: “A cause of action against a person arising from any act of that person in furtherance of the person’s right of petition or free speech under the United States Constitution or the California Constitution in connection with a public issue shall be subject to a special motion to strike, unless the court determines that the plaintiff has established that there is a probability that the plaintiff will prevail on the claim.”
A two-step process is followed in determining the outcome of a special motion to strike pursuant to section 425.16. “ ‘First, the court decides whether the defendant has made a threshold showing that the challenged cause of action is one arising from protected activity. (§ 425.16, subd. (b)(1).) “A defendant meets this burden by demonstrating that the act underlying the plaintiff’s cause fits one of the categories spelled out in section 425.16, subdivision (e)” [citation]. If the court finds that such a showing has been made, it must then determine whether the plaintiff has demonstrated a probability of prevailing on the claim. (§ 425.16, subd. (b)(1) . . . .’) [Citations.] ‘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.’ [Citation.]” (Thomas v. Quintero (2005) 126 Cal.App.4th 635, 645, italics omitted.)
“Appellate review of a trial court's ruling on an anti-SLAPP motion is de novo. [Citation.] ‘ “Thus, [appellate] review is conducted in the same manner as the trial court in considering an anti-SLAPP motion.” ’ [Citation.]” (Summit Bank v. Rogers (2012) 206 Cal.App.4th 669, 681 682.) “Further, as our review is de novo, our analysis proceeds independently of the trial court's reasoning. We review the judgment rather than the reasons for the judgment. [Citation.] It is the validity of the trial court’s action rather than its reasons which is reviewed. [Citation.]” (Sanowicz v. Bacal (2015) 234 Cal.App.4th 1027, 1034, fn. 5.)
B. Reed’s Complaint Challenges Protected Activity
In the trial court, Reed repeatedly argued that conduct alleged in the FAC was not protected activity under section 425.16, subdivision (e). On appeal, however, Reed “concedes” that the opposite is true. We agree. “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. [Citations.]” (Cabral v. Martins (2009) 177 Cal.App.4th 471, 479 480.)
By conceding that respondents’ alleged acts were protected activity under the anti-SLAPP law, Reed also implicitly concedes that she bore the burden in the trial court of establishing a probability of prevailing on her causes of action. (See Equilon Enterprises v. Consumer Cause, Inc. (2002) 29 Cal.4th 53, 67.)
C. Reed Did Not Demonstrate a Probability of Prevailing on Her Claims
1. Issues on Appeal
Reed contends that the three orders granting respondents’ special motions to strike must be reversed because she established a probability of prevailing on her breach of contract claim. Specifically, Reed argues that the trial court erred by failing to credit evidence supporting her theories that all three respondents are liable for breaching the attorney fee provision and the confidentiality clause in the May 2010 Settlement Agreement.
“ ‘In order to establish a probability of prevailing on the claim (§ 425.16, subd. (b)(1)), a plaintiff responding to an anti-SLAPP motion must “ ‘state[] and substantiate[] a legally sufficient claim.’ ” [Citations.] 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.] In deciding the question of potential merit, the trial court considers the pleadings and evidentiary submissions of both the plaintiff and the defendant (§ 425.16, subd. (b)(2)); though the court does not weigh the credibility or comparative probative strength of competing evidence, it should grant the motion if, as a matter of law, the defendant’s evidence supporting the motion defeats the plaintiff’s attempt to establish evidentiary support for the claim. [Citation.]’ [Citation.]” (Vogel v. Felice (2005) 127 Cal.App.4th 1006, 1017, italics omitted.) “Thus, plaintiffs’ burden as to the second prong of the anti-SLAPP test is akin to that of a party opposing a motion for summary judgment. [Citation.] We determine de novo whether that burden has been met. [Citations.].” (Navellier v. Sletten, supra, 106 Cal.App.4th 763, 768.)
Thus, the issue raised by this appeal is whether Reed carried her burden of establishing that her breach of contract cause of action was both legally sufficient and supported by a sufficient prima facie showing of facts to sustain a favorable judgment if her evidence was credited.
“ ‘A cause of action for damages for breach of contract is comprised of the following elements: (1) the contract, (2) plaintiff's performance or excuse for nonperformance, (3) defendant's breach, and (4) the resulting damages to plaintiff.’ [Citation.] ‘Implicit in the element of damage is that the defendant’s breach caused the plaintiff's damage.’ [Citation.]” (Agam v. Gavra (2015) 236 Cal.App.4th 91, 104, italics omitted.) We will separately consider whether there was sufficient evidence to establish these required elements under either of the two breach of contract theories alleged in the FAC.
2. The Attorney Fee Provision
The FAC set forth the following pertinent factual allegations: The attorney fee provision in the May 2010 Settlement Agreement required “that each party would be responsible for paying their own fees and costs relating to” the fraudulent transfer action; defendants breached this term “by attempting to seek attorneys’ fees and costs which were prohibited by the agreement”; and “[a]s a result of Defendants[’] breach of contract by seeking further attorneys’ fees, plaintiff has incurred substantial attorney’s fees and costs to defend against Defendant’s attempts to seek attorneys’ fees and costs.”
As our factual summary reflects, evidence of the alleged contract was before the trial court because Murphy produced a copy of the May 2010 Settlement Agreement. Furthermore, although neither party produced the July 2011 fee motion during the trial court proceedings, that motion was discussed in the appellate decisions in McQueen II, which were before the court. Reed appears to assume that this evidence is sufficient prima facie proof that respondents breached the attorney fee provision by filing the July 2011 fee motion. We disagree. The attorney fee provision stated that each party would be responsible for their own fees and costs. Thus, this provision afforded a potential partial defense to a statutory claim for attorney fees. But it did not state that the parties would refrain from filing an attorney fee motion in the McQueen elder abuse litigation, nor did it contain a waiver of the right to file such a motion.
Furthermore, other evidence before the trial court was inconsistent with Reed’s pleaded theory that respondents breached the attorney fee provision by filing the July 2011 fee motion. First, there were express temporal limitations in the May 2010 Settlement Agreement. According to prefatory language in the agreement, the material terms governed the parties’ relationship only during the period until the appeal in McQueen I was resolved. The attorney fee provision itself also specifically stated that the parties would pay their own fees and costs relating to the fraudulent transfer action “until the appeal is completed.” Second, the McQueen II decision, which was part of the evidence, established that the July 2011 fee motion was filed more than a month after the Supreme Court denied review of McQueen I. (McQueen II, supra, 59 Cal.4th at p. 606.) Taken together, this evidence supported the conclusion that the attorney fee provision was no longer in effect when the July 2010 fee motion was filed.
On appeal, Reed contends that the trial court erroneously failed to credit two additional pieces of evidence that support her claim that respondents breached the attorney fee provision. First, Reed directs our attention to the footnote in the 2012 Respondent’s Brief which we have quoted in our factual summary. Reed contends this footnote constitutes an admission that all three respondents breached the May 2010 Settlement Agreement by filing the July 2011 fee motion. We disagree. As discussed above, the July 2011 fee motion sought two distinct categories of fees, those incurred during the McQueen I appeal and those incurred during the fraudulent transfer action. Although Reed vigorously opposed the fee motion in the trial court, she did not contend that Taye had agreed to be responsible for his own fees incurred in the fraudulent transfer action. Murphy pointed out this fact in a footnote in the 2012 Respondent’s Brief because it showed that Reed had forfeited a potential defense to her liability for a portion of Taye’s fees. But Murphy did not expressly or implicitly admit that respondents breached a provision in the May 2010 Settlement Agreement by filing the July 2011 fee motion.
The second piece of evidence Reed relies on in her appellate brief is the declaration of James Reed that was filed in support of her motion for relief from dismissal due to mistake. According to Reed, this declaration constitutes prima facie proof that the attorney fee provision was a complete waiver of the right to recover fees relating to the fraudulent conveyance action and the trial court committed reversible error by refusing to consider it.
As our factual summary demonstrates, Reed used her motion for relief from an attorney mistake to advance new arguments and provide additional case authority allegedly supportive of her opposition to Murphy’s special motion to strike. Her former counsel James Reed also took the opportunity to offer his opinion about the intent behind the attorney fee provision and to recount a conversation with Reed about whether they would appeal the order granting the July 2011 attorney fee motion. Thus, despite its misleading title, Reed’s motion for relief from dismissal was a motion for reconsideration. (Powell v. County of Orange (2011) 197 Cal.App.4th 1573, 1577 [“The name of a motion is not controlling, and, regardless of the name, a motion asking the trial court to decide the same matter previously ruled on is a motion for reconsideration under Code of Civil Procedure section 1008.”].)
Reed’s motion for reconsideration was not timely because it was filed more than 10 days after service of notice of entry of the order granting Murphy’s motion to strike. (§ 1008, subd. (a).) Furthermore, Reed’s motion was lacking to the extent she failed to provide the trial court with any explanation or justification for waiting until after Murphy’s motion to strike was granted to advance new legal arguments and produce evidence that was already within her possession when she filed her original opposition to the motion. (See, e.g., Shiffer v. CBS Corp. (2015) 240 Cal.App.4th 246, 255.) Under these circumstances, the trial court did not abuse its discretion by granting Reed’s request to consider the exhibit that had been erroneously identified in the original attorney declaration but refusing to consider Reed’s new arguments or additional evidence.
On appeal, Reed contends the trial court had an obligation to consider her attorney declaration because it was extrinsic evidence that was relevant to resolve an ambiguity in the attorney fee provision contract language. Reed did not make this argument in the trial court. Despite the fact that Reed opposed three consecutive special motions to strike, she never argued that the attorney fee provision was ambiguous or requested that the trial court consider extrinsic evidence regarding its meaning. To the contrary, Reed argued that the provision was not ambiguous; that Murphy had previously admitted that respondents breached that provision; and that any claim to the contrary tortured the contact language.
Furthermore, Reed mistakenly assumes that the trial court never considered the allegedly relevant evidence that James Reed included in his declaration in support of Reed’s motion for relief from mistake. As noted, the court acted within its discretion by refusing to reconsider its February 27 order because of new arguments and additional evidence provided in Reed’s attorney declaration. However, Reed relied on those same arguments and additional evidence when she opposed the special motions filed by Burnham Brown and Taye. The fact that the trial court did not agree with Reed’s arguments when ruling on those subsequent motions does not mean that it did not consider her evidence.
Nor are we persuaded by the merits of Reed’s untimely argument that the declaration of James Reed filed in support of Reed’s motion for relief from dismissal contained extrinsic evidence regarding the meaning of the attorney fee provision. As discussed above, aside from his explanation regarding the misidentified exhibits, James Reed addressed two matters in that declaration. First, Reed gave his opinion about the intended purpose and actual function of the attorney fee provision. That opinion was argument, not evidence. By the time Reed opposed the third motion to strike (filed by Taye), James Reed refined his declaration to include a factual representation that he helped draft the attorney fee provision. However, he did not provide the court with any concrete factual information about interactions between the parties which led them to draft that attorney fee provision.
The other matter that James Reed addressed in his second declaration (and in subsequent declarations filed thereafter) was a discussion he recalled having with Reed before the trial court ruled on the July 2011 fee motion. James Reed declared that he and Reed agreed they would not appeal an anticipated attorney fee award unless it included fees incurred during the fraudulent transfer action. Notably, James Reed did not state that he or Reed believed at that time that the attorney fee provision precluded Taye from seeking those fees. Indeed, despite multiple opportunities, James Reed never stated that the attorney fee provision in the May 2010 Settlement Agreement had any impact on Reed’s decision to appeal the July 2011 attorney fee order.
Even if we treat James Reed’s interpretation of the attorney fee provision as evidence, it does not support Reed’s pleaded theory that the act of filing a fee motion constituted a breach of the May 2010 Settlement Agreement. At most, the declaration is evidence that the parties intended for the attorney fee provision to preclude recovery of any fees arising out of the fraudulent transfer action. It is not evidence that any respondent agreed not to file a statutory attorney fee motion in the McQueen litigation after the McQueen I appeal was finally resolved. As the trial court found in the order denying Reed relief from mistake and the orders granting the two subsequent motions to strike, “while the terms of the settlement agreement may perhaps provide a defense to a fee motion, no language in the settlement agreement suggests that filing a fee motion would constitute a breach of this settlement agreement.”
Taking a different tack, Reed contends that the trial court erred because it rejected her claim that respondents breached the attorney fee provision for reasons that were not advanced by respondents in their special motions to strike. According to Reed, “the court should not have been able to throw out Appellant’s case on the court’s own arguments, and it was in error to do so.” First, the court did not make “arguments.” It made findings regarding deficiencies in Reed’s evidence. Second, Reed fails to provide factual or legal support for her contention that these findings were improper. As previously discussed, Reed concedes on appeal that the evidentiary burden shifted to Reed to support her claims. Even when a special motion to strike is based on an issue of law, the plaintiff is not relieved of her “burden of presenting a sufficient ‘showing of facts to sustain a favorable judgment.’ [Citation.]” (Navellier v. Sletten, supra, 106 Cal.App.4th at p. 775.)
3. The Confidentiality Clause
The FAC set forth the following pertinent factual allegations about the confidentiality clause: The May 2010 Settlement Agreement contained an agreement that each party would keep the terms of the agreement confidential; Murphy breached this confidentiality provision in 2012 by disclosing some terms of the settlement “while in the process of arguing a matter in California Appellate Court”; and, as a result of this alleged breach, Reed “suffered damages resulting from a loss of her reputation, as well as her husband’s reputation and, as a consequence, loss of income.”
We conclude that Reed failed to establish a prima facie case supporting this alleged theory. As already noted, evidence of the pleaded contract was produced by Murphy. Furthermore, Reed’s allegation that Murphy breached the confidentiality clause was supported by evidence in the form of the 2012 Respondent’s Brief. Although the trial court initially refused to consider that document, it subsequently took judicial notice of it pursuant to Reed’s motion for relief from mistake. The 2012 Respondent’s Brief plainly refers to the terms of the settlement which the parties agreed to keep confidential. Thus, Reed did produce evidence that the confidentiality clause was breached. However, our de novo review of the record does not disclose any evidence of damages resulting from the alleged breach of the confidentiality clause.
As noted at the outset of our discussion, the damages element of a breach of contract claim requires proof of damages caused by the alleged breach. (Agam v. Gavra, supra, 236 Cal.App.4th at p. 104.) In this case, when Reed opposed Murphy’s special motion to strike, she completely ignored the damages element of all of her claims. After Murphy’s motion was granted, James Reed filed multiple declarations in which he stated that Reed was damaged by the alleged breach of the attorney fee provision, claiming Reed would not have appealed the order granting the July 2011 fee motion if that order had not included fees incurred during the fraudulent transfer action. However, Reed did not provide any evidence that the breach of the confidentiality clause caused her any damage whatsoever. Thus, we conclude that Reed did not make a sufficient prima facie showing to support her contract claim because she did not produce any evidence that Murphy’s alleged breach of the confidentiality clause caused her damage. (Navellier v. Sletten, supra, 106 Cal.App.4th at p. 775 [plaintiffs failed to carry their burden under second prong of anti-SLAPP test when evidence of damages was wholly lacking].)
D. Reed’s Waiver Theory is Ill-Conceived
Despite her express concession that the FAC arises from statutorily protected activity, Reed separately argues that respondents waived their right to the protection of the anti-SLAPP statute by executing the May 2010 Settlement Agreement. As support for her waiver argument, Reed relies on Navellier v. Sletten (2002) 29 Cal.4th 82 (Navellier).
Navellier was a dispute about the administration of a trust which led to a series of lawsuits. (29 Cal.4th 82.) First, plaintiffs filed an action against their former trustee for violating various duties, which was settled pursuant to an agreement in which the trustee waived certain claims against plaintiffs. Then, plaintiffs filed a federal action against the trustee, who responded with counterclaims which were dismissed because they had been waived as part of the prior settlement. (Id. at p. 86.) After the federal action concluded, plaintiffs brought a state court action alleging that the trustee’s pursuit of counterclaims in the federal action constituted fraud and breach of contract. (Id. at pp. 86 87.) The trial court and Court of Appeal found the challenged actions were outside the scope of the anti-SLAPP statute. (Id. at p. 87.) However, the Supreme court reversed, finding that the first prong of the anti-SLAPP test was satisfied because the action arose out of statutorily protected activity. (Id. at pp. 85 95.) In reaching this conclusion, the court noted, among other things, that the second prong of the anti-SLAPP statute “preserves appropriate remedies for breaches of contracts involving speech” because “a defendant who in fact has validly contracted not to speak or petition has in effect ‘waived’ the right to the anti-SLAPP statute’s protection in the event he or she later breaches that contract.” (Id. at p. 94.) Thus, the Navellier court remanded the case with instructions that the Court of Appeal consider whether plaintiffs established a probability of prevailing on the merits of their fraud and breach of contract claims. (Id. at pp. 95 96.)
In this court, Reed contends that Navellier demonstrates that respondents waived the protection of the anti-SLAPP statute by “contracting not to disclose confidential information or seek attorney’s fees.” Not so. Navellier establishes that the filing of a claim is protected activity under the first prong of the anti-SLAPP statute even when the claimant previously executed an express release of that claim. (Navellier, supra, 29 Cal.4th at pp. 85, 89 95.) Thus, in order for the Navellier plaintiffs to withstand the defendant’s special motion to strike their complaint, they had to carry their burden under the second prong of the anti-SLAPP test. (Id. at pp. 95 96.) The same rules apply here and, as discussed above, Reed did not establish a probability of prevailing on her breach of contract cause of action against the respondents.
As noted, the Navellier court remanded the case for the Court of Appeal to address whether the plaintiffs had carried their burden of establishing a probability of success on the merits. (Navellier, supra, 29 Cal.4th at p. 95.) On remand, the Court of Appeal found that the Navellier plaintiffs failed to meet their burden under the second prong of the anti-SLAPP test. (See Navellier v. Sletten, supra, 106 Cal.App.4th 763.) The court reasoned that plaintiffs’ fraud claim was untenable because the act of filing counterclaims was protected by the litigation privilege. (Id. at pp. 770 771.) The court then assumed for purposes of appeal that the breach of contract claim was not barred by the litigation privilege. Nevertheless, it found that plaintiffs failed to carry their evidentiary burden because they did not produce any evidence of damages. (Id. at pp. 774 775.)
In the present case, the parties disagree about whether Reed’s breach of contract claim is barred by the litigation privilege. Like the appellate court in Navellier, we assume without deciding that Reed’s breach of contract claim is not barred. Nevertheless, for the reasons outlined above, Reed did not carry her burden of establishing a probability of prevailing on her breach of contract cause of action under either of the theories pleaded in the FAC.
E. Respondents Are Entitled to Appellate Attorney Fees
Murphy and Taye contend they are entitled to recover appellate attorney fees for successfully defending the orders granting the special motions to strike. “Since section 425.16, subdivision (c) provides for an award of attorney fees and costs to a prevailing defendant on a special motion to strike, and does not preclude recovery of appellate attorney fees by a prevailing defendant-respondent, those fees are recoverable. [Citation.]” (Dove Audio, Inc. v. Rosenfeld, Meyer & Susman (1996) 47 Cal.App.4th 777, 785; see also Wanland v. Law Offices of Mastagni, Holstedt & Chiurazzi (2006) 141 Cal.App.4th 15, 21 22.)
IV. DISPOSITION
The appealed orders are affirmed. Respondents are awarded costs and attorney fees on appeal. This case is remanded to the trial court to determine the amount of costs and appellate attorney fees respondents are entitled to recover.
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RUVOLO, P. J.
We concur:
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REARDON, J.
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STREETER, J.
Description | Carol Reed (Reed) appeals from six separate orders issued by the trial court in her action for breach of contract, malicious prosecution, and abuse of process filed against respondents, Fessha Taye (Taye), Daniel Murphy (Murphy), and Burnham Brown. Three of the appealed orders grant respondents’ respective motions to strike Reed’s complaint pursuant to section 425.16 of the Code of Civil Procedure, this state’s anti-SLAPP statute. The fourth appealed order is a denial of Reed’s motion to be relieved of dismissal due to a mistake relating to her opposition to the anti-SLAPP motions. Finally, Reed appeals two orders granting attorney fees to Taye and Murphy. |
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