Case Name: Anthony Tran, et al. v. Apache Tech Inc., et al.
Case No.: 17-CV-315201

Currently before the Court is the special motion by defendant Edward McDonald (“McDonald”), as an individual and dba McDonald Law, to strike the complaint of plaintiffs Anthony Tran (“Tran”), as an individual and on behalf of Apache Technology LLC, and Apache Technology Inc. dba Grow Warrior LED (collectively, “Plaintiffs”).

Factual and Procedural Background

This action arises out of a failed business venture. Tran and defendant Andre La Forge (“La Forge”) started a business, Apache Technology LLC, whereby they would develop and sell LED lights. (Complaint, ¶¶ 1-6.) La Forge bought lights in China, which Tran reversed engineered, modified, and improved. (Id. at ¶ 7.) Tran also designed other lights. (Ibid.) Tran then transferred the schematics for the lights and other data to Apache Technology LLC. (Id. at ¶ 8.) Apache Technolgy LLC entered into agreements with defendant Palpilot International Corporation (“Palpoint”) and Suba Technology Inc. (“Suba”) to fabricate the lenses and build the lights. (Complaint, ¶ 10-13.) Additionally, defendant Greg A. Schlick (“Schlick”) persuaded NASA and Stanford University to purchase the lights for use in research. (Complaint, 11.) Suba ultimately produced 534 lights for Apache Technology LLC, though the lights were not compliant with Underwriter Laboratory standards. (Id. at ¶ 14.)

While Tran and La Forge attempted to make the lights compliant with Underwriter Laboratory standards, their business relationship broke down. (Complaint, ¶¶ 15-16.) La Forge told Tran that Apache Technology LLC was shut down, the lights would not be built under Apache Technology LLC, and he was going to use another company, defendant Apache Tech Inc., to build the lights. (Ibid.)

Thereafter, litigation between Tran and La Forge ensued regarding the lights and Apache Technology LLC’s profits. (Complaint, ¶¶ 18-134.) McDonald purported to represent some of the parties involved in that lawsuit. (Ibid.) In this action, Plaintiffs allege that the defendants, including McDonald, submitted false testimony and evidence to the court during the prior litigation. (Ibid.)

On August 29, 2017, Plaintiffs filed a complaint against several defendants, including McDonald, alleging causes of action for: (1) abuse of process; (2) fraud; (3) concealment; (4) misrepresentation; (5) unfair competition; (6) trade secret conversion; (7) trademark infringement; (8) loss of goodwill; (9) misappropriated likeness; (10) tortious interference with contract; (11) intentional interference with prospective economic advantage; and (12) voidable transfer.

On October 4, 2017, McDonald filed the instant special motion to strike the first cause of action for abuse of process. Plaintiffs filed papers in opposition to the motion on December 21, 2017.

Discussion

Pursuant to Code of Civil Procedure section 425.16, McDonald moves to strike the first cause of action for abuse of process on the grounds that the claim arises out of an act in furtherance of his right of petition and Plaintiffs cannot demonstrate a probability of prevailing on their claim.

I. Request for Judicial Notice

McDonald asks the Court to take judicial notice of various documents filed in the cases of Anthony Tran v. Andre La Forge, et al. (Santa Clara County Superior Court, Case No. 2012-1-CV-236232) and Apache Tech, Inc. et al. v. Anthony Tran (Santa Clara County Superior Court, Case No. 16-CV-292520).

Each item identified in the request for judicial notice is a court record that is relevant to the pending motion. Evidence Code section 452, subdivision (d) states that the court may take judicial notice of “[r]ecords of any court of this state.” That provision permits the trial court to “take judicial notice of the existence of judicial opinions and court documents, along with the truth of the results reached—in the documents such as orders, statements of decision, and judgments—but [the court] cannot take judicial notice of the truth of hearsay statements in decisions or court files, including pleadings, affidavits, testimony, or statements of fact.” (People v. Woodell (1998) 17 Cal.4th 448, 455.)

Accordingly, McDonald’s request for judicial notice is GRANTED as to the existence of the court records and the truth of the results reach in documents such as orders, statements of decision, and judgments.

II. Procedural Issues

As a preliminary matter, Plaintiffs assert that McDonald’s notice of motion is defective because hearing date is identified as December 19, 2017 at page 1, line 23 of the notice of motion, but is elsewhere identified as January 9, 2018. It is undisputed that the hearing date for McDonald’s special motion to strike was noticed, and is set, for January 9, 2018. Plaintiffs do not contend that they were prejudiced by the erroneous date identified in the notice of motion. Moreover, Plaintiffs’ opposition to the instant motion on its merits waives any defects or irregularities in the notice of motion. (See Carlton v. Quint (2000) 77 Cal.App.4th 690, 697 [“ ‘It is well settled that the appearance of a party at the hearing of a motion and his or her opposition to the motion on its merits is a waiver of any defects or irregularities in the notice of motion. [Citations.] This rule applies even when no notice was given at all. [Citations.] Accordingly, a party who appears and contests a motion in the court below cannot object on appeal or by seeking extraordinary relief in the appellate court that he had no notice of the motion or that the notice was insufficient or defective.’ ”].) Therefore, this procedural argument is waived.

Next, Plaintiffs contend that McDonald’s moving papers are defective because “all his papers are believed to be in 11 point type.” (Opp’n., p. 8:12-13.) Plaintiffs do not present any reasoned argument or evidence supporting their belief that McDonald used a typeface smaller than 12 points, and it is not readily apparent to the Court that the typeface used by McDonald is too small. (See Cal. Rules of Ct., rule 2.104 [“Unless otherwise specified in these rules, all papers filed must be prepared using a font size not smaller than 12 points.”]; see also Badie v. Bank of America (1998) 67 Cal.App.4th 779, 784-785; Schaeffer Land Trust v. San Jose City Council (1989) 215 Cal.App.3d 612, 619, fn. 2 [“[A] point which is merely suggested by a party’s counsel, with no supporting argument or authority, is deemed to be without foundation and requires no discussion.”].) Consequently, this procedural argument lacks merit.

III. Substantive Merits of the Motion

A. The Anti-SLAPP Statute

“Section 425.16 provides … that ‘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.’ [Citation.] ‘As used in this section, “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” includes:’ ” (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. (Navellier v. Sletten (2002) 29 Cal.4th 82, 87–88 (Navellier); Code Civ. Proc., § 425.16. subd. (e).)

The statute “posits … a two-step process for determining whether an action is a SLAPP. First, the court decides whether the defendant has made a threshold showing that the challenged cause of action is one arising from protected activity. [Citation.] ‘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. [Citations.]” (Navellier, supra, 29 Cal.4th at p. 88.) “ ‘ “To satisfy this prong, the plaintiff must ‘state [ ] and substantiate [ ] a legally sufficient claim.’ [Citation.] ‘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.” ’ ” ’ [Citation.]” (Freeman v. Schack (2007) 154 Cal.App.4th 719, 726–27.) “The second prong … is considered under a standard similar to that employed in determining nonsuit, directed verdict or summary judgment motions. … The plaintiff may not rely solely on its complaint, even if verified; instead, its proof must be made upon competent admissible evidence. [Citation.] In reviewing the plaintiff’s evidence, the court does not weigh it; rather, it simply determines whether the plaintiff has made a prima facie showing of facts necessary to establish its claim at trial. [Citation.]” (Paiva v. Nichols (2008) 168 Cal.App.4th 1007, 1017.)

B. The Tort of Abuse of Process

“The common law tort of abuse of process arises when one uses the court’s process for a purpose other than that for which the process was designed. [Citations.] It has been ‘interpreted broadly to encompass the entire range of ‘procedures’ incident to litigation.’ [Citation.]” (Rusheen v. Cohen (2006) 37 Cal.4th 1048, 1056 (Rusheen); JSJ Ltd. Partnership v. Mehrban (2012) 205 Cal.App.4th 1512, 1522 (JSJ).) “Process” is the “means of compelling a defendant to appear in court” or the “means whereby a court compels compliance with its demands.” (Meadows v. Bakersfield Sav. & Loan Ass’n (1967) 250 Cal.App.2d 749, 753.) The tort of abuse of process arises when one uses “the machinery of the legal system for an ulterior motive.” (Trear v. Sills (1999) 69 Cal.App.4th 1341, 1359.) “ ‘[T]he essence of the tort [is] … misuse of the power of the court; it is an act done in the name of the court and under its authority for the purpose of perpetrating an injustice.’ [Citation.] To succeed in an action for abuse of process, a litigant must establish that the defendant (1) contemplated an ulterior motive in using the process, and (2) committed a willful act in the use of the process not proper in the regular conduct of the proceedings. [Citation.]” (Rusheen, supra, 37 Cal.4th at p. 1057; JSJ, supra, 205 Cal.App.4th at p. 1522.)

C. First Prong Analysis

McDonald argues that the first cause of action for abuse of process arises out of communicative conduct in the case of Anthony Tran v. Andre La Forge, et al. (Santa Clara County Superior Court, Case No. 2012-1-CV-236232) (“Prior Action”). Specifically, McDonald contends that the claim arises out of the presentation of evidence and witnesses, the submission of pleadings, motions, and supporting documentation, and argument before the court in the Prior Action. McDonald argues that his conduct in defending his clients in the Prior Action constitutes protected activity.

McDonald’s argument is well-taken. To determine whether a claim arises out of protected activity, courts “ ‘examine the principal thrust or gravamen of a plaintiff’s cause of action ….’ ” (Hylton v. Frank E. Rogozienski, Inc. (2009) 177 Cal.App.4th 1264, 1271-1272, italics in original.) Courts “assess the principal thrust by identifying ‘[t]he allegedly wrongful and injury-producing conduct … that provides the foundation for the claim.’ [Citation.]” (Ibid.)

Here, the gravamen of the claim for abuse of process is that McDonald, and the other defendants, made false statements and presented false evidence and testimony in the Prior Action. (See Complaint, ¶¶ 30-124 [indicating that the claim is based on the submission of false statements, pleadings, evidence, and reports to the court in the Prior Action], 124-132 [“In summary the false testimony and false evidence presented to this Court includes ….”], 133 [“In all, all evidence offered by Defendants and their counsel was shown to be falsified and fraudulent.”], 133-134 [Plaintiffs seek damages from defendants based on the submission of false evidence and testimony in the Prior Action].) For example, the claim is based on: McDonald’s allegedly false representation to the court that he represented various corporate entities in the Prior Action; McDonald’s filing of an answer on behalf of those entities; McDonald’s defense of the Prior Action on behalf of his clients; representations made to the court in the Prior Action that documents did not exist; McDonald’s allegedly false representation to the court that he had produced documents; filing allegedly false declarations; filing an allegedly false memorandum of costs; and McDonald’s subornation of false testimony, reports, and evidence. (Id. at ¶¶ 31-32, 40, 44-48, 50, 68, 77, 82-83, 87, 89, 103, 111, 115.) The claim is also based on the filing of a settlement offer under Code of Civil Procedure section 998, the filing of a motion for summary judgment against Tran, and McDonald’s role in the maintenance and prosecution of the cross-complaint against Tran in the Prior Action. (Id. at ¶¶ 42-43, 77.) Thus, the first cause of action for abuse of process arises out of alleged misconduct in the Prior Action, i.e., the alleged misuse of tools afforded by the law to the defendants in the Prior Action.

Accordingly, the Court finds that the conduct at issue here—the presentation of evidence and witnesses, the submission of pleadings, motions, and supporting documentation, and argument before the court in the Prior Action—constitutes protected activity under Code of Civil Procedure section 425.16, subdivision (e)(1) and (2). (See Booker v. Rountree (2007) 155 Cal.App.4th 1366, 1370 [“There is no doubt the cross-complaint arises out the underlying litigation, so it is subject to the anti-SLAPP statute. The gravamen of the claim is misconduct in the underlying litigation. Indeed, that is the essence of the tort of abuse of process—some misuse of process in a prior action—and it is hard to imagine an abuse of process claim that would not fall under the protection of the statute. Abuse of process claims are subject to a special motion to strike.”]; see also Cabral v. Martins (2009) 177 Cal.App.4th 471, 480 [“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”]; Finton Construction, Inc. v. Bidna & Keys, APLC (2015) 238 Cal.App.4th 200, 210 (Finton) [same]; Rusheen, supra, 37 Cal.4th at p. 1056 [anti-SLAPP statute protects “communicative conduct such as the filing, funding, and prosecution of a civil action,” including such acts when “committed by attorneys in representing clients in litigation”]; Briggs v. Eden Council for Hope & Opportunity (1999) 19 Cal.4th 1106, 1115 [statements made in connection with or in preparation for litigation are protected activity within the meaning of the anti-SLAPP statute]; Navellier, supra, 29 Cal.4th at p. 90 [because the filing of lawsuits is an aspect of the First Amendment right of petition, a claim based on actions taken in connection with litigation falls squarely within the ambit of the anti-SLAPP statute’s ‘arising from” prong].)

In opposition, Plaintiffs argue that the first cause of action for abuse of process does not arise out of protected activity because McDonald’s conduct, and the conduct of the other defendants, was illegal. For the reasons set forth below, the Court finds that Plaintiffs’ argument is not well-taken.

“Unlawful or criminal activities do not qualify as protected speech or petition activities under the anti-SLAPP statute. [Citations.] But when the defendant’s assertedly protected activity may or may not be unlawful, the defendants may invoke the anti-SLAPP statute unless the activity is unlawful as a matter of law. [Citation.] An activity may be deemed unlawful as a matter of law when the defendant does not dispute that the activity was unlawful, or uncontroverted evidence conclusively shows the activity was unlawful. [Citations.]” (Dwight R. v. Christ B. (2013) 212 Cal.App.4th 697, 711-712; Birkner v. Lam (2007) 156 Cal.App.4th 275, 285 [there is a narrow exception for illegal conduct, but it “applies only if a ‘defendant concedes, or the evidence conclusively establishes, that the assertedly protected speech or petition activity was illegal as a matter of law’ ”].) “[I]t has been recognized that ‘the Supreme Court’s use of the phrase “illegal” [in Flatley] was intended to mean criminal, and not merely violative of a statute.’ [Citation.]” (Finton, supra, 238 Cal.App.4th at pp. 210–211.) To demonstrate that the defendant’s action was illegal as a matter of law, the plaintiff must, at the very least, identify with particularity the statute or statutes the defendant allegedly violated. (Bergstein v. Stoock & Stroock & Lavin LLP (2015) 236 Cal.App.4th 793, 809 (Bergstein).) “Additionally, … the plaintiff must show the specific manner in which the statute or statutes were violated with reference to their elements. A generalized assertion that a particular statute was violated by the filing or maintenance of the underlying action without a particularized showing of the violation will be insufficient to demonstrate illegality as a matter of law.” (Id. at p. 809.)

In their opposition, Plaintiffs do not identify with particularity the statute or statutes that McDonald or the other defendants allegedly violated. For this reason alone, Plaintiffs argument regarding illegality fails. (See Bergstein, supra, 236 Cal.App.4th at pp. 809-810.)

Even when attempts are made to discern the statute or statutes that McDonald or the other defendants allegedly violated, Plaintiffs’ argument regarding illegality fails.

First, Plaintiffs mention perjury, subornation of perjury, and falsifying evidence in their pleadings, which are crimes under the California Penal Code. (See Pen. Code, §§ 118, 127, 134.) However, in their opposition papers, Plaintiffs do not show the specific manner in which these statutes were violated with reference to their elements. (See ibid.) Moreover, Plaintiffs do not present any evidence showing that McDonald or the other defendants concede that their activities were unlawful. Furthermore, Plaintiffs do not present uncontroverted evidence that conclusively shows the activities were unlawful. The only evidence offered by Plaintiffs in support of their opposition is the declaration of Tran and the attachments thereto. However, Tran’s declaration, and the exhibits attached thereto, are not admissible because Tran’s declaration omits the required language under Code of Civil Procedure section 2015.5 that the declaration is made under the laws of the state of California. (See Code Civ. Proc., § 2015.5; see also Kulshrestha v. First Union Comm. Corp. (2004) 33 Cal.4th 601, 611-612 [stating that failure to comply with section 2015.5 renders a declaration inadmissible].)

Second, Plaintiffs state in their opposition that McDonald’s representation of his clients in the prior action was illegal. Plaintiffs cite the City of San Diego v. San Diegans for Open Government (2016) 3 Cal.App.5th 568 (City of San Diego) in support of their contention. However, that case not does not establish that McDonald’s representation of his clients constituted criminal conduct. City of San Diego merely reiterates the rule that a corporation that has had its powers suspended lacks the legal capacity to prosecute or defend a civil action during its suspension. (City of San Diego, supra, 3 Cal.App.5th at p. 577.) In that case, the Court of Appeal found that the attorney representing the suspended corporation had acted unethically by prosecuting an action on the suspended entity’s behalf. (Id. at p. 578.) The court did not indicate that the attorney’s conduct was illegal or criminal conduct.

Consequently, Plaintiffs argument that the first cause of action does not arise out of protected activity because the alleged wrongful conduct was illegal lacks merit.

As McDonald meets his burden to show that the claim arises out of protected activity, the burden shifts to Plaintiffs to establish a probability of prevailing on the merits.

D. Second Prong Analysis

As McDonald persuasively argues, Plaintiffs cannot demonstrate a probability of prevailing on their claim for abuse of process because the litigation privilege is a complete defense to the claim.

“The tort of abuse of process is barred by the litigation privilege, which protects a ‘publication or broadcast …. [¶] … [¶] (b) In any … (2) judicial proceeding ….’ (Civ.Code, § 47, subd. (b)(2), italics added.) Section 47, subdivision (b)(2) is a defense to an abuse of process action. [Citations.] ‘The privilege is broadly applied to protect most publications within lawsuits provided there is some connection between the lawsuit and the publication. [Citation.]’ [Citations.] Doubts about the privilege’s applicability are resolved in favor of its use.” (Pollock v. University of Southern California (2003) 112 Cal.App.4th 1416, 1429–1431; Rubin v. Green (1993) 4 Cal.4th 1187, 1193 [communications with some relation to judicial proceedings are absolutely immune from tort liability by the litigation privilege].) Thus, “ ‘[p]leadings and process in a case are generally viewed as privileged communications.’” (Rusheen, supra, 37 Cal.4th at p. 1058; Navellier, supra, 106 Cal.App.4th at p. 770.)

Notably, the litigation privilege will protect communicative acts even if the communicative acts constitute perjury. For example, in Rusheen, the Supreme Court held: “[W]here the cause of action is based on a communicative act, the litigation privilege extends to those noncommunicative actions which are necessarily related to that communicative act. In this case, because the claim for abuse of process was based on the communicative act of filing allegedly false declarations of service to obtain a default judgment, the postjudgment enforcement efforts, including the application for writ of execution and act of levying on property, were protected by the privilege.” (Rusheen, supra, 37 Cal.4th at p. 1052.)

Here, the first cause of action for abuse of process arises out of the following communicative acts: the presentation of evidence and witnesses; the submission of pleadings, motions, and supporting documentation; and argument before the court in the Prior Action. This activity is protected under the litigation privilege and, thus, the claim is barred as alleged against McDonald. (See S.A. v. Maiden (2014) 229 Cal.App.4th 27, 43, fn. 6 [“By so concluding, we need not address alternative reasons for barring S.A.’s abuse of process claim. Nevertheless, we note that because the gravamen of S.A.’s claim is the initiation and maintenance of DVPA restraining order proceedings, the litigation privilege under Civil Code section 47, subdivision (b), would also likely apply to bar his abuse of process claim.”].) The fact that this case allegedly involves fraudulent communications, perjured testimony, and false evidence is irrelevant; the litigation privilege has been applied in “numerous cases” involving “fraudulent communication or perjured testimony.” (Flatley v. Mauro (2006) 39 Cal.4th 299, 322.)

For these reasons, Plaintiffs cannot establish a probability of prevailing on their abuse of process claim.

E. Conclusion

Accordingly, McDonald’s special motion to strike the first cause of action for abuse of process is GRANTED.

VI. Plaintiffs’ Request for Sanctions

In connection with their opposition, Plaintiffs request an award of monetary sanctions in the amount of $13,230 under Code of Civil Procedure section 425.16, subdivision (c).

That statute provides that, “[i]f the court finds that a special motion to strike is frivolous or is solely intended to cause unnecessary delay, the court shall award costs and reasonable attorney’s fees to a plaintiff prevailing on the motion, pursuant to Section 128.5.” (Code Civ. Proc., § 425.16, subd. (c).) The reference to section 128.5 means a court must use the procedures and apply the substantive standards of section 128.5 in deciding whether to award attorney fees under the anti-SLAPP statute. (Moore v. Shaw (2004) 116 Cal.App.4th 182, 199 (Moore).) In other words, “[a]n award of sanctions under the anti-SLAPP statute has two elements. First, the trial court must make a finding the SLAPP motion was frivolous or brought solely to delay the proceedings. Second, the court must follow the procedural requirements for a sanction order set out in section 128.5 which requires, among other things, the order ‘shall recite in detail the conduct or circumstances justifying the order.’ Failure to satisfy both these elements renders the order invalid.” (Morin v. Rosenthal (2004) 122 Cal.App.4th 673, 682, fn. omitted.)

“A determination of frivolousness requires a finding the anti-SLAPP ‘motion [was] ‘totally and completely without merit’ [citation], that is, ‘any reasonable attorney would agree such motion is totally devoid of merit.’ [Citation.]’ [Citation.]” (Moore, supra, 116 Cal.App.4th at p. 199.)

Here, McDonald prevailed on his motion and, therefore, the motion is not frivolous. Consequently, Plaintiffs are not entitled to an award of monetary sanctions and their request for monetary sanctions is DENIED.