Filed 3/29/22 Cordova v. Snell & Wilmer CA4/3

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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

FOURTH APPELLATE DISTRICT

DIVISION THREE

Appeal from an order of the Superior Court of Orange County, David L. Belz, Judge. Reversed and remanded.

Umberg Zipser, Scott B. Garner, Todd W. Smith and Halim Dhanidina for Defendants and Appellants.

Connor, Fletcher & Hedenkamp, Edmond M. Connor, Matthew J. Fletcher, Douglas A. Hedenkamp and Michael Sapira for Plaintiff and Respondent.

* * *

Defendants Snell & Wilmer LLP and Colin Higgins (collectively, Snell & Wilmer) appeal from the trial court’s denial of their special motion to strike pursuant to Code of Civil Procedure section 425.16 (anti-SLAPP motion) addressing plaintiff Mark Cordova’s petition for instructions and complaint.[1] Mark’s petition and complaint alleges Snell & Wilmer committed legal malpractice by jointly representing Mark’s mother and brother, whose interests Mark contends were adverse, in various legal matters including litigation against Mark. The trial court denied defendants’ anti-SLAPP motion, concluding Mark’s causes of action did not arise from protected activity. We reverse and remand for the trial court to determine whether Mark met his burden on the second prong of the anti-SLAPP (strategic lawsuit against public participation) analysis.

FACTS AND PROCEDURAL HISTORY

Mark is the son of Rachel and brother of Matthew and Karen Cordova. Rachel and her late husband Moses founded a successful bolt distribution company, Cordova Bolt, the voting shares of which are held in the Moses E. and Rachel L. Cordova Living Trust (Trust). Rachel and Moses were the trustees of the Trust; and Mark, Matthew, and Karen were the beneficiaries. When Moses became ill, Mark took over as president and chief financial officer of Cordova Bolt. Rachel and Matthew served as vice-presidents of Cordova Bolt. In 2011, Rachel granted Mark and Matthew a joint power of attorney for management of her assets.

In 2014, Moses died, leaving Rachel as the sole trustee of the Trust. Not long afterward, Rachel began to suffer from dementia. Thus began a struggle between the siblings over management of Rachel’s assets. In 2016, Rachel executed a power of attorney and advanced health care directive, designating Mark and Matthew as her attorneys in fact. Then, in August of 2017, apparently without consulting her longtime estate planning attorney, Rachel executed a new power of attorney and advanced health care directive appointing Karen as the sole agent. The estate planning attorney prevailed upon Rachel to revoke these documents.

Mark then filed a petition, in the fall of 2017, seeking to establish a conservatorship over Rachel. Mark requested that he and Matthew assume their roles as successor cotrustees, but Matthew refused. Instead, Matthew produced a new power of attorney, more recently executed by Rachel, naming Matthew as her sole attorney in fact. In response, Mark filed a new petition in 2018, which began this lawsuit. This petition asserted that Mark was now the successor trustee of the Trust by operation of law, given Rachel’s alleged incapacity. The petition also asserted Mark was the sole successor trustee because Matthew had failed to accept his role as successor cotrustee, and in the alternative, sought removal of Matthew as trustee. Matthew, for his part, now produced documents executed by Rachel in May of 2018, making Matthew the sole successor trustee.

Snell & Wilmer were engaged by Matthew and Rachel in March of 2018, evidently in response to Mark’s petition, for the purpose of removing Mark from his roles as president of Cordova Bolt and as a member of its board. Snell & Wilmer took various steps to accomplish this, including drafting various documents, which Snell & Wilmer had Matthew sign on Rachel’s behalf. In response, Mark filed a new lawsuit challenging these actions, in which Snell & Wilmer represented Matthew and Rachel.

In connection with their representation of Rachel and Matthew, Snell & Wilmer took direction from and strategized with various individuals in addition to their clients Matthew and Rachel. These people included Frances Diaz (Karen’s attorney and later Matthew’s wife’s attorney), Cheryl Walsh (a trust attorney who represented Rachel, including in the conservatorship proceedings), and Amy Gostanian (Matthew’s attorney in the conservatorship proceedings). Snell & Wilmer represented Rachel and Matthew until February 7, 2019, when the trial court dismissed Mark’s lawsuit relating to his removal from Cordova Bolt.

Snell & Wilmer later reentered the litigation, representing Matthew in a limited capacity in connection with certain discovery issues. Its involvement with the Cordova family concluded in November of 2019, when Mark threatened to file a lawsuit against the firm.

In February of 2020, Mark filed a “Petition for Instructions and Complaint” against Snell & Wilmer (complaint). In the complaint, Mark set out much of the history detailed above and sought several alternative forms of relief. Mark alleged Snell & Wilmer allowed Matthew and Frances Diaz to “manage its representation of Rachel,” facilitating undue influence over Rachel and despite a conflict of interest between Matthew and Rachel. Mark also alleged that “[a]s a result of [Snell & Wilmer’s] actions in failing to declare a conflict and in continuing to act against Rachel’s interest in litigation, the Trust’s assets were irreparably damaged,” and that Snell & Wilmer “permitted undue influencers Matthew and third-party Frances Diaz to direct litigation on behalf of Rachel,” and improperly failed to disclose in discovery “evidence of a crime or fraud being exercised over Rachel . . . .”

The complaint requested a court order compelling Matthew to join in litigation against Snell & Wilmer, and set forth three causes of action against Snell & Wilmer: (1) legal malpractice; (2) breach of fiduciary duty; and (3) declaratory relief with respect to Rachel’s capacity to retain Snell & Wilmer. Mark alleged he was trustee of the Trust, both by virtue of his status in earlier documents as a successor trustee and through an “Interim Settlement,” giving him the right to assert these claims on behalf of the Trust.

In response to the complaint, Snell & Wilmer filed their anti-SLAPP motion under Code of Civil Procedure section 425.16. Snell & Wilmer contended their conduct in representing Matthew and Rachel involved protected activity, in the form of “[l]itigation-related activities,” and that Mark’s claims would fail for several reasons: (1) lack of standing; (2) the statute of limitations; (3) lack of duty; and (4) the litigation privilege. Mark opposed the anti-SLAPP motion, arguing Snell & Wilmer’s conduct was not protected activity and that he could prevail on his claims. During the pendency of the motion, the trial court suspended Matthew as trustee of the Trust and appointed a private professional fiduciary.

The trial court denied the anti-SLAPP motion, concluding the causes of action alleged in the complaint did not arise from protected activity. Snell & Wilmer timely appealed.

DISCUSSION

1. Anti-SLAPP Principles

Code of Civil Procedure section 425.16 permits a defendant to file a special motion to strike challenging any cause of action “arising from any act of [the defendant] in furtherance of the [defendant’s] right of petition or free speech under the United States Constitution or the California Constitution in connection with a public issue . . . .” (Id., subd. (b)(1).) This motion has several procedural advantages, including an immediate stay of discovery (id., subd. (g)), priority in scheduling a hearing (id., subd. (f)), an immediate right of appeal (id., subd. (i)), and an award of attorney fees for a prevailing defendant (id., subd. (c)(1)). The statute defines an “‘act in furtherance of a person’s right of petition or free speech under the United States or California Constitution in connection with a public issue’” as including “(1) any written or oral statement or writing made before a legislative, executive, or judicial proceeding, or any other official proceeding authorized by law, (2) any written or oral statement or writing made in connection with an issue under consideration or review by a legislative, executive, or judicial body, or any other official proceeding authorized by law, (3) any written or oral statement or writing made in a place open to the public or a public forum in connection with an issue of public interest, or (4) any other conduct in furtherance of the exercise of the constitutional right of petition or the constitutional right of free speech in connection with a public issue or an issue of public interest.” (Id., subd. (e).)

“The statute seeks ‘“to encourage participation in matters of public significance and prevent meritless litigation designed to chill the exercise of First Amendment rights. [Citation.] The Legislature has declared that the statute must be ‘construed broadly’ to that end.”’” (Gaynor v. Bulen (2018) 19 Cal.App.5th 864, 876.) “Resolution of an anti-SLAPP motion involves two steps. First, the defendant must establish that the challenged claim arises from activity protected by [Code of Civil Procedure] section 425.16. [Citation.] If the defendant makes the required showing, the burden shifts to the plaintiff to demonstrate the merit of the claim by establishing a probability of success.” (Baral v. Schnitt (2016) 1 Cal.5th 376, 384.) “The court does not weigh evidence or resolve conflicting factual claims. Its inquiry is limited to whether the plaintiff has stated a legally sufficient claim and made a prima facie factual showing sufficient to sustain a favorable judgment. It accepts the plaintiff’s evidence as true, and evaluates the defendant’s showing only to determine if it defeats the plaintiff’s claim as a matter of law.” (Id. at pp. 384-385.)

“A claim arises from protected activity when that activity underlies or forms the basis for the claim. [Citations.] Critically, ‘the defendant’s act underlying the plaintiff’s cause of action must itself have been an act in furtherance of the right of petition or free speech.’” (Park v. Board of Trustees of California State University (2017) 2 Cal.5th 1057, 1062-1063.) “[T]he focus is on determining what ‘the defendant’s activity [is] that gives rise to his or her asserted liability—and whether that activity constitutes protected speech or petitioning.’” (Id. at p. 1063.) “In short, in ruling on an anti-SLAPP motion, courts should consider the elements of the challenged claim and what actions by the defendant supply those elements and consequently form the basis for liability.” (Ibid.) We review the trial court’s order de novo. (ComputerXpress, Inc. v. Jackson (2001) 93 Cal.App.4th 993, 999.)

In the more specific category of anti-SLAPP motions challenging lawsuits against attorneys, there are two main strands of authority bearing on this case. The first extends protected status to a broad variety of litigation-related acts and statements, including by attorneys, by virtue of their connection to litigation or anticipated litigation. (See, e.g., People ex rel. Fire Ins. Exchange v. Anapol (2012) 211 Cal.App.4th 809 [prelitigation insurance claims by attorneys may be protected]; Cabral v. Martins (2009) 177 Cal.App.4th 471 [attorneys’ revision of will and representing client in probate litigation was protected activity]; Neville v. Chudacoff (2008) 160 Cal.App.4th 1255 [prelitigation letter from employer to customers suggesting not to do business with former employee was protected activity]; Healy v. Tuscany Hills Landscape & Recreation Corp. (2006) 137 Cal.App.4th 1 [letter from homeowners association to members discussing ongoing litigation was protected].) The second holds that lawsuits for legal malpractice brought by former clients against their attorneys do not trigger the anti-SLAPP statute. (See, e.g., PrediWave Corp. v. Simpson Thacher & Bartlett LLP (2009) 179 Cal.App.4th 1204 [former client’s legal malpractice suit did not trigger anti-SLAPP statute]; Kolar v. Donahue, McIntosh & Hammerton (2006) 145 Cal.App.4th 1532 (Kolar) [same]; Benasra v. Mitchell Silberberg & Knupp LLP (2004) 123 Cal.App.4th 1179 [same]; Jespersen v. Zubiate-Beauchamp (2003) 114 Cal.App.4th 624 [same].)

2. Mark’s Claim Arises from Protected Activity

We begin by acknowledging the tension that exists between the two strands of authority discussed above. On the one hand, Snell & Wilmer’s conduct described in Mark’s complaint is unquestionably related to litigation. As the complaint itself shows, Snell & Wilmer’s involvement was initially prompted by Mark’s litigation: “Mrs. Cordova has repeatedly stated to me since her son MARK filed the Petition to have her conserved that she wants Mark’s name removed from this amendment.”[2] It was undertaken with litigation in mind: “Matthew and his mother need the protection of a reputable law firm to help them preserve the value of the company as it has become apparent that Mark intends to dilute the value of Cordova Bolt in pursuing his litigation.”[3] “Given how litigious Mark is, it seems likely he will file a lawsuit to enjoin the board from removing him, and will likely assert a host of other claims against Matthew and Rachel (i.e., breach of fiduciary duty, labor law violations, etc.), whether they are true or not”;[4] “we suggest sending a demand letter from Snell & Wilmer detailing all of Mark’s wrongdoings and potential liability (highlighted above) and threatening a lawsuit if he does not resign.”[5] And it ultimately resulted in further litigation, in which Snell & Wilmer represented Matthew and Rachel in court. Moreover, Mark’s complaint also appears to seek damages from Snell & Wilmer directly arising from their representation of Matthew and Rachel in litigation, including particularly in connection with a discovery dispute over e-mail communications between Snell & Wilmer and its clients.

On the other hand, Mark’s complaint asserts causes of action for legal malpractice and breach of fiduciary duty, rather than causes of action more typically associated with the anti-SLAPP statute, such as libel or malicious prosecution. As we have previously held, “A malpractice claim focusing on an attorney’s incompetent handling of a previous lawsuit does not have the chilling effect on advocacy found in malicious prosecution, libel, and other claims typically covered by the anti-SLAPP statute. In a malpractice suit, the client is not suing because the attorney petitioned on his or her behalf, but because the attorney did not competently represent the client’s interests while doing so. Instead of chilling the petitioning activity, the threat of malpractice encourages the attorney to petition competently and zealously. This is vastly different from a third party suing an attorney for petitioning activity, which clearly could have a chilling effect.” (Kolar, supra, 145 Cal.App.4th at p. 1540.)

The resolution of these competing strands of authority turns on Mark’s relationship with Snell & Wilmer. If Mark is a former client of Snell & Wilmer, or properly stands in the shoes of a former client, Mark may assert a cause of action for legal malpractice against Snell & Wilmer without triggering the anti-SLAPP statute. If not, Mark is instead “a third party suing an attorney for petitioning activity,” which, as we held in Kolar, “clearly could have a chilling effect” on speech and would trigger the statute. (Kolar, supra, 145 Cal.App.4th at p. 1540.)

Mark argues he stands in Rachel’s shoes by virtue of his status as successor trustee of the Trust. It is true that, upon becoming trustee, a successor trustee inherits the powers of his or her predecessor, including the power to sue for malpractice. (Borissoff v. Taylor & Faust (2004) 33 Cal.4th 523, 529-530.) But Mark is not the present holder of the powers of the trustee of the Trust. Instead, the person holding those powers is an interim professional trustee appointed by the court before it heard and decided the anti-SLAPP motion.

Mark argues he might still be a currently serving cotrustee because the court’s order appointing the interim trustee only suspends Matthew, not Mark. We find this argument unpersuasive for several reasons. First, as part of the ex parte application by which Matthew was suspended and the interim trustee appointed, Mark requested that the trial court appoint him as special trustee of the Trust’s voting shares of Cordova Bolt. The trial court denied that request, instead appointing a private professional as the interim trustee for all purposes, signaling its intent to exclude Mark from service as a trustee. Second, the trial court’s order requires Matthew to deliver the assets of the Trust to the interim trustee, not to the interim trustee and Mark as cotrustees. Third, as a practical matter, California law requires cotrustees to act unanimously. (Prob. Code, § 15620.) The stated purpose of the trial court’s appointment of an interim trustee was for that person to manage the Trust’s assets during the litigation independently from the parties. That would not be possible if Mark remained a cotrustee and held a veto power over the acts of the independent trustee. Fourth, the trial court’s language in its minute order also implicitly supports this view: “The interim trustee shall have all the powers as set forth in the Trust.”

Mark also argues that, in evaluating whether his claims arise from protected activity, we cannot consider matters outside the allegations contained in his complaint, or consider the veracity of his allegations, citing Sprengel v. Zbylut (2015) 241 Cal.App.4th 140 (Sprengel). In Sprengel, the attorney defendants sought to defeat the plaintiff’s malpractice claim through an anti-SLAPP motion, arguing that “undisputed evidence” demonstrated the nonexistence of an attorney-client relationship between themselves and the plaintiff. (Sprengel, supra, 241 Cal.App.4th at p. 157, fn. 7; id. at p. 156.) The court in Sprengel rejected this argument, noting that in evaluating whether the plaintiff’s claims arise from protected activity, the court does not address arguments on the merits or the veracity of the plaintiff’s allegations. (Ibid.)

We do not read Sprengel as forbidding consideration of the parties’ affidavits or evidence in evaluating whether the plaintiff’s claims arise from protected activity. We come to this conclusion in light of both the express language in Code of Civil Procedure section 425.16, subdivision (b)(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”) and the decision of our Supreme Court in Equilon Enterprises v. Consumer Cause, Inc. (2002) 29 Cal.4th 53, 67 (“The pleadings and affidavits submitted by the parties establish that Equilon’s action for declaratory and injunctive relief is one arising from Consumer Cause’s activity in furtherance of its constitutional rights of speech or petition”). Instead, we conclude the Sprengel court simply declined to resolve a matter that was factually disputed: namely, whether an attorney-client relationship was formed between the plaintiff and defendants.

Here, however, there can be no factual dispute. The court’s order clearly appoints an interim trustee of the Trust, leaving Mark not standing in Rachel’s shoes as a former client of Snell & Wilmer.

Finally, Mark argues that his third cause of action, for declaratory relief regarding Rachel’s capacity to enter an engagement agreement with Snell & Wilmer, does not implicate any litigation related activities and therefore does not trigger the anti-SLAPP statute. We disagree. The purpose of Rachel’s retention of Snell & Wilmer was directly related to Mark’s litigation. A challenge to her capacity to retain Snell & Wilmer clearly implicates Snell & Wilmer’s litigation related activities.

Accordingly, we conclude the trial court erred in finding that Mark’s complaint did not allege protected activity.

3. We Remand for the Trial Court to Decide the Second Prong

Having concluded Mark’s complaint did not arise from protected activity, the trial court declined to rule on the parties’ evidentiary objections or reach the second prong of the anti-SLAPP analysis. We remand for the trial court to conduct that analysis in the first instance.

Snell & Wilmer argue we should resolve these issues ourselves because they predominantly present legal questions and remand to the trial court involves substantial delay. While we have discretion to take that approach, we decline to do so, in keeping with the approach of most appellate courts. (Collier v. Harris (2015) 240 Cal.App.4th 41, 58.) Nothing in the record suggests there exists any unusual urgency requiring immediate action, and absent an immediate need “[w]e think it best that the able and experienced trial judge decide the issue.” (Ibid.)

DISPOSITION

The order is reversed and remanded for further proceedings consistent with this opinion.

Defendants Snell & Wilmer LLP and Colin Higgins shall recover their costs on appeal.

SANCHEZ, J.

WE CONCUR:

BEDSWORTH, ACTING P. J.

MOORE, J.

[1] First names are used throughout for ease of reference because many of the parties share a common last name. No disrespect is intended.

[2] Frances Diaz’s e-mail to Snell & Wilmer describing the purpose of the engagement, reproduced in Mark’s complaint.

[3] Frances Diaz’s e-mail to Snell & Wilmer discussing their role, reproduced in Mark’s complaint.

[4] Colin Higgins’s e-mail to Frances Diaz discussing potential removal of Mark from Cordova Bolt, reproduced in Mark’s complaint.

[5] Frances Diaz’s e-mail to Colin Higgins discussing strategy for removal of Mark from Cordova Bolt, reproduced in Mark’s complaint.