Filed 4/21/20 Boutin Jones, Inc. v. California State Grange CA3

NOT TO BE PUBLISHED

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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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

THIRD APPELLATE DISTRICT

(Sacramento)

—-

BOUTIN JONES, INC.,

Plaintiff, Cross-defendant and Appellant,

v.

CALIFORNIA STATE GRANGE,

Defendant, Cross-complainant and Respondent.

C088242

(Super. Ct. No. 34201800235930CUMCGDS)

This case is an offshoot of the long running litigation between The National Grange of the Order of Patrons of Husbandry (the National Grange) and a former California charter, now known as the California Guild (the Old Grange), which has been before us on two previous occasions. (See National Grange of the Order of Patrons of Husbandry v. California Guild (2017) 17 Cal.App.5th 1130 (National Grange I) and National Grange of Order of Patrons of Husbandry v. California Guild (2019) 38 Cal.App.5th 706 (National Grange II).) Appellant and cross-defendant Boutin Jones, Inc. (Boutin Jones), a law firm, represented the Old Grange in the underlying litigation with the National Grange. During the course of the litigation, the National Grange revoked the Old Grange’s charter and sought a declaration that all real and personal property possessed or controlled by the Old Grange should be transferred to a newly chartered grange, respondent and cross-complainant California State Grange (the New Grange). (National Grange I, supra, at p. 1140.) The trial court granted the National Grange’s motion for summary judgment on the claim for declaratory relief, and another panel of this court affirmed. (Id. at p. 1134.)

The present case concerns the use of funds from bank accounts that were originally controlled by the Old Grange, but were ordered transferred to the New Grange, to pay for legal services rendered by Boutin Jones. Boutin Jones initiated the current round of litigation with a complaint for declaratory relief, seeking a declaration that the firm was entitled to keep funds received from the Old Grange. The New Grange responded with a cross-complaint for conversion and receiving stolen property in violation of Penal Code section 496. Boutin Jones moved to strike the cross-complaint pursuant to Code of Civil Procedure section 425.16, the anti-SLAPP statute (strategic lawsuits against public participation). The trial court denied the motion, finding that the New Grange’s causes of action do not arise from protected activity. We agree and affirm.

I. BACKGROUND

Boutin Jones commenced the instant action by filing a complaint for declaratory relief against the New Grange on June 27, 2018. The complaint alleges that Boutin Jones received $240,000 in fees from the Old Grange in October 2015, and seeks a declaration that the firm was entitled to accept and retain them.

The New Grange responded with a cross-complaint for damages. The cross-complaint alleges that Boutin Jones received nearly $700,000 in fees from the Old Grange between August 2013 and October 2015. The alleged payments are reflected on an attached schedule, which shows that Boutin Jones received $240,000 in October 2015, after the trial court declared that the New Grange was the only chartered entity entitled to own Grange property in California, the Old Grange had no standing to retain Grange property, and all such property should be transferred to the New Grange. (National Grange I, supra, 17 Cal.App.5th at p. 1143.)

The cross-complaint alleges that Boutin Jones had actual notice, as the Old Grange’s counsel of record, that the real and personal property in the Old Grange’s possession and control as of April 5, 2013, (when the National Grange revoked the Old Grange’s charter) belonged to the Grange, and could not properly be used to fund litigation against it. According to the New Grange, such notice was conveyed “not later than July 12, 2013,” when the National Grange filed the first amended complaint seeking an order requiring the Old Grange to turn over Grange property.

The cross-complaint further alleges the payments to Boutin Jones were only revealed to the New Grange through hard-fought discovery. According to the cross-complaint, “Boutin Jones . . . through a deliberate course of sandbagging on discovery, actively concealed the fact that Boutin Jones was being paid from the [subject] accounts, which in fact were property of and belonged exclusively to the Grange. . . . Only after a motion to compel was granted over vigorous objection were documents produced to the Grange which revealed that Boutin Jones had been paid from Grange property. . . . Based on the active concealment and discovery sandbagging by Boutin Jones, the improper use of Grange property to pay Boutin Jones was not discovered by the Grange until December of 2015.”

The cross-complaint asserts causes of action for conversion and receiving stolen property in violation of Penal Code section 496. Specifically, the cross-complaint alleges that Boutin Jones received stolen property with respect to the amounts received from the Old Grange in October 2015 ($240,000), and committed conversion with respect to the amounts received from August 2013 through October 2015 ($695,384). The cross-complaint seeks compensatory damages, punitive and treble damages, and attorneys’ fees.

Boutin Jones answered the cross-complaint and filed a special motion to strike pursuant to section 425.16. The motion argued the New Grange’s claims arose from Boutin Jones’ use of Grange money to fund litigation against the New Grange and the National Grange, which, in Boutin Jones’ view, constitutes protected litigation activity under the anti-SLAPP statute. The motion further argued the New Grange could not show a probability of prevailing because its claims were barred by the applicable statutes of limitation and the New Grange did not have an immediate right to possess the funds in the bank accounts at the time Boutin Jones received the fees.

The New Grange opposed the motion, arguing its conversion and receipt of stolen property claims arose from Boutin Jones’ wrongful receipt of fees alleged to have been paid from money known to belong to the Grange, rather than protected petitioning activity. The trial court agreed with the New Grange and denied the motion to strike. This appeal timely followed.

II. DISCUSSION

A. Statutory Background and Standard of Review

“A SLAPP is a civil lawsuit that is aimed at preventing citizens from exercising their political rights or punishing those who have done so. ‘ “ While SLAPP suits masquerade as ordinary lawsuits such as defamation and interference with prospective economic advantage, they are generally meritless suits brought primarily to chill the exercise of free speech or petition rights by the threat of severe economic sanctions against the defendant, and not to vindicate a legally cognizable right.” ’ ” (Simpson Strong-Tie Co., Inc. v. Gore (2010) 49 Cal.4th 12, 21.)

The anti-SLAPP statute “provides a procedure for weeding out, at an early stage, meritless claims arising from protected activity.” (Baral v. Schnitt (2016) 1 Cal.5th 376, 384 (Baral).) The statute applies to “cause[s] 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.” (§ 425.16, subd. (b)(1), italics added.) As used in the statutory scheme, 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’ includes: . . . any written or oral statement or writing made before a legislative, executive, or judicial proceeding, or any other official proceeding authorized by law.” (§ 425.16, subd. (e), italics added.)

Resolution of an anti-SLAPP motion involves two steps. “At the first step, the moving defendant bears the burden of identifying all allegations of protected activity, and the claims for relief supported by them. When relief is sought based on allegations of both protected and unprotected activity, the unprotected activity is disregarded at this stage. If the court determines that relief is sought based on allegations arising from activity protected by the statute, the second step is reached. There, the burden shifts to the plaintiff to demonstrate that each challenged claim based on protected activity is legally and factually substantiated. The court, without resolving evidentiary conflicts, must determine whether the plaintiff’s showing, if accepted by the trier of fact, would be sufficient to sustain a favorable judgment. If not, the claim is stricken. Allegations of protected activity supporting the stricken claim are eliminated from the complaint, unless they also support a distinct claim on which the plaintiff [or cross-complainant] has shown a probability of prevailing.” (Baral, supra, 1 Cal.5th at p. 396.)

We review the trial court’s ruling on an anti-SLAPP motion de novo, applying the same two-step analysis as the trial court. (Park v. Board of Trustees of California State University (2017) 2 Cal.5th 1057, 1067 (Park).) We consider “the pleadings, and supporting and opposing affidavits stating the facts upon which the liability or defense is based.” (§ 425.16, subd. (b)(2).) “We do not, however, weigh the evidence, but accept the plaintiff’s submissions as true and consider only whether any contrary evidence from the defendant establishes its entitlement to prevail as a matter of law.” (Park, supra, at p. 1067.)

B. Arising from Protected Activity

We begin and end with the first step of the anti-SLAPP analysis, in which we consider whether the New Grange’s claims “arise from protected activity.” (See Baral, supra, 1 Cal.5th at p. 396; Park, supra, 2 Cal.5th at p. 1062.) “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.’ [Citations.] ‘[T]he mere fact that an action was filed after protected activity took place does not mean the action arose from that activity for the purposes of the anti-SLAPP statute.’ [Citations.] Instead, the 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.’ [Citation.] ‘The only means specified in section 425.16 by which a moving defendant can satisfy the [“arising from”] requirement is to demonstrate that the defendant’s conduct by which plaintiff claims to have been injured falls within one of the four categories described in subdivision (e).’ ” (Park, supra, at pp. 1062-1063.)

“ ‘If the core injury-producing conduct upon which the plaintiff’s claim is premised does not rest on protected speech or petitioning activity, collateral or incidental allusions to protected activity will not trigger application of the anti-SLAPP statute.’ ” (Area 51 Productions, Inc. v. City of Alameda (2018) 20 Cal.App.5th 581, 594; see also Baral, supra, 1 Cal.5th at p. 394 [“Allegations of protected activity that merely provide context, without supporting a claim for recovery, cannot be stricken under the anti-SLAPP statute”].) Accordingly, “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.” (Park, supra, 2 Cal.5th at p. 1063.) Applying the elements-based analysis mandated by Park, we conclude the New Grange’s claims do not arise from protected activity.

1. Conversion

“Conversion is the wrongful exercise of dominion over the property of another. The elements of a conversion are the plaintiff’s ownership or right to possession of the property at the time of the conversion; the defendant’s conversion by a wrongful act or disposition of property rights; and damages.” (Oakdale Village Group v. Fong (1996) 43 Cal.App.4th 539, 543-544.) Conversion is a strict liability tort. (Moore v. Regents of University of California (1990) 51 Cal.3d 120, 144, fn. 38.) Therefore, the “wrongful act” element of a conversion claim does not require proof the defendant knew or intended to receive property belonging to another, or otherwise received the subject property in bad faith. (Oakdale Village Group v. Fong, supra, at p. 544 [“questions of good faith, lack of knowledge and motive are ordinarily immaterial”].)

The cross-complaint alleges Boutin Jones committed conversion by accepting money from the Old Grange drawn from accounts that properly belonged to the New Grange. As in the trial court, Boutin Jones argues the conversion cause of action arises from protected activity because the money was received as payment for the firm’s representation of the Old Grange in the underlying litigation, which was itself protected activity. This argument falls well short of the mark.

It is certainly true, as Boutin Jones urges, that anti-SLAPP protection for petitioning activity applies to litigation-related conduct (Kolar v. Donahue, McIntosh & Hammerton (2006) 145 Cal.App.4th 1532, 1537), and protected petitioning activity “includes qualifying acts committed by attorneys in representing clients in litigation.” (Rusheen v. Cohen (2006) 37 Cal.4th 1048, 1056 (Rusheen); 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”].) It is also true that the cross-complaint identifies Boutin Jones as counsel of record for the Old Grange in the underlying litigation and describes the firm’s litigation-related conduct in some detail. But the fact that Boutin Jones received the disputed money as payment for litigation services does not establish that the conversion cause of action arises from the firm’s protected activity in providing those services. (City of Cotati v. Cashman, supra, 29 Cal.4th at p. 78 [“That a cause of action arguably may have been triggered by protected activity does not entail that it is one arising from such”]; see also Optional Capital, Inc. v. DAS Corp. (2014) 222 Cal.App.4th 1388, 1400 [“conduct is not automatically protected merely because it is related to pending litigation; the conduct must arise from the litigation,” italics added].)

Here, the conduct by which the New Grange claims to have been injured is Boutin Jones’ taking of money from accounts belonging to the New Grange, not the litigation services for which the money was paid. Those services “merely provide context” showing how Boutin Jones came to receive the money to which the New Grange claims a superior right. (Baral, supra, 1 Cal.5th at p. 394.) Because the conversion cause of action only requires proof that Boutin Jones received the disputed money, but not proof of the circumstances occasioning that receipt, the cause of action does not “arise from” protected activity within the meaning of section 425.16. (Park, supra, 2 Cal.5th at p. 1068 [“ ‘Plaintiff could have omitted allegations regarding [alleged protected activity] and still state the same claims’ ”].)

Boutin Jones resists this conclusion, arguing the act of accepting money for litigation services constitutes protected activity under the anti-SLAPP statute. Boutin Jones observes, correctly, that litigation funding decisions have been found to constitute protected petitioning activity. (See, e.g., Sheley v. Harrop (2017) 9 Cal.App.5th 1147, 1166 (Sheley) [“insofar as a cause of action is based on the payment of funds to maintain a lawsuit, this constitutes protected activity that will be subject to a special motion to strike pursuant to section 425.16 unless the opposing party can demonstrate a probability of prevailing on the claim”]; see also Lennar Homes of California, Inc. v. Stephens (2014) 232 Cal.App.4th 673, 681 [wife’s support of her husband’s litigation was protected activity under the anti-SLAPP statute]; Ludwig v. Superior Court (1995) 37 Cal.App.4th 8, 18 [“person who supports and encourages the filing of a lawsuit” engages in protected activity].) But Boutin Jones offers no authority for the proposition that the act of receiving payment is also protected activity.

Boutin Jones directs our attention to Rusheen, supra; specifically, the portion of the opinion stating that the anti-SLAPP statute protects “communicative conduct such as the filing, funding, and prosecution of a civil action,” including “qualifying acts committed by attorneys in representing clients in litigation.” (Rusheen, supra, 37 Cal.4th at p. 1056.) But Boutin Jones cannot be said to have engaged in “funding” the underlying litigation by merely receiving fees. (See Black’s Law Dict. (10th ed. 2014) p. 788, col. 2 [To “fund” means “[t]o furnish money to (an individual, entity, or venture), esp. to finance a particular project”].) Nor can Boutin Jones be said to have been representing the Old Grange, or otherwise acting on the Old Grange’s behalf, by accepting fees. Boutin Jones does not explain how Rusheen might otherwise support the contention that the act of receiving fees constitutes protected activity, and we decline to develop such arguments for it.

Boutin Jones also argues, without citation to any directly relevant authority, that: “An attorney’s acceptance of payment from a client to fund litigation is a communicative act in furtherance of the client’s right to petition, and is subject to protection under the anti-SLAPP statute, because the act helps to advance the client’s right.” We are not inclined to agree that the act of accepting fees, rather than paying them, is communicative conduct at all, let alone communicative conduct in furtherance of a person’s right of petition. (See Drum v. Bleau, Fox & Associates (2003) 107 Cal.App.4th 1009, 1026 [holding, in the context of the litigation privilege, that “the act of removing property from one source (here a financial institution) and depositing it in a place controlled by the levying officer” is noncommunicative], disapproved on another ground in Rusheen, supra, 37 Cal.4th at p. 1065; see also Chen v. Berenjian (2019) 33 Cal.App.5th 811, 821 [“Levying on property is essentially a taking, a physical act that is not communicative”].) It is one thing to say that the act of funding litigation is communicative conduct that advances a person’s right of petition or assists in the exercise of that right, as another panel of this court found in Sheley. (Sheley, supra, 9 Cal.App.5th at pp. 1155, 1167-1168 [decedent daughters’ act of wrongfully obtaining money to fund litigation against decedent’s wife was an act in furtherance of daughters’ right of petition because it enabled them to pursue litigation]; see also Greco v. Greco (2016) 2 Cal.App.5th 810, 821 (Greco) [“Funding civil litigation is communicative conduct for purposes of section 425.16”].) But it is quite another to say that a law firm’s receipt of fees is communicative conduct in furtherance of its client’s right of petition, as Boutin Jones would have us do. (Cf. Graham-Sult v. Clainos (9th Cir. 2014) 756 F.3d 724, 737 (Graham-Sult) [“Generally, taking possession of personal property is not a protected activity, because it is conduct, not a written or oral statement”].) That the firm may require fees to continue providing litigation services to the client, either as a matter of contract or practical necessity, does not, in our view, establish that the firm’s receipt of fees advances the client’s right of petition or assists in the exercise of that right. After all, law firms do not charge fees to benefit their clients. Setting these issues aside, however, and focusing on the elements-based analysis mandated by Park, we are convinced the New Grange’s conversion cause of action arises, not from the fact that Boutin Jones received fees, but from the fact that Boutin Jones was compensated with money from an improper source. Put another way, the core-injury producing conduct was the unprotected taking of money from accounts that belonged to the New Grange, not the protected use to which the money may have been put.

Greco, supra, 2 Cal.App.5th 810, a case neither party cites, well illustrates the distinction. There, the plaintiff-sister, a beneficiary of her deceased parents’ trust and estates, sued her defendant-brother in a civil action for elder abuse, and in a probate action for breach of fiduciary duty, constructive fraud, and conversion. (Id. at pp. 816-817.) In both actions, the sister alleged the brother, as trustee of the trust and executor of the estates, filed litigation against her in bad faith and for improper purposes using trust and estate funds to do so. (Ibid.) As relevant here, the sister alleged the brother “ ‘engaged in a course of conduct . . . fomenting litigation and other wrongful acts, against . . . beneficiaries of the Trust and/or estate, in an attempt to disinherit them.’ ” (Id. at p. 817.) The brother responded with anti-SLAPP motions, arguing the sister’s claims “arose from actions and communications in the underlying litigation and therefore were protected activity.” (Id. at p. 818.) The sister countered that “the gravamen of the [claims] was that by taking money to pursue his personal vendetta, [the brother] wrongfully took money in breach of his fiduciary duties.” (Ibid.) Supporting declarations showed that the brother withdrew substantial amounts of money from the trust and estates to fund the underlying litigation. (Ibid.)

The trial court found the anti-SLAPP statute did not apply, and another panel of this court affirmed as to all but one cause of action (for constructive fraud). (Greco, supra, 2 Cal.App.5th at pp. 825-826.) With respect to the elder abuse cause of action, the court determined that “it was [the brother’s] withdrawal of the funds from the trust and estates that was the alleged wrongful act . . . . Although [the sister] did allege the underlying lawsuits were wrongful, her claim for recovery was not based on the wrongful act of pursuing meritless or wasteful litigation, but on taking trust and estate funds.” (Id. at p. 823.) The court explained: “Funding the litigation solely to pursue a vendetta was the reason the activity (i.e., the taking) was allegedly wrongful . . . . The test under section 425.16 focuses on . . . ‘the defendant’s activity that give rise to his or her asserted liability—and whether that activity constitutes protected speech or petitioning.’ [Citation.] [¶] The taking, whether or not it is actually wrongful and why, does not fall within any of the conduct described in subdivision (e) of section 425.16.” (Id. at pp. 823-824.)

The Greco court applied similar reasoning to the sister’s causes of action for breach of fiduciary duty. (Greco, supra, 2 Cal.App.5th at pp. 824-826.) Although some of the sister’s allegations in the probate petition “appear to challenge the bringing of the underlying litigation, a protected activity,” the court concluded that “the petition limits the act that caused injury to the taking.” (Id. at p. 825.) The court observed: “There is no allegation that the ‘fomenting litigation’ or the alleged attempt to disinherit certain beneficiaries caused any injury; the only ‘wrongful, injurious act(s) alleged by the plaintiff’ [citation] is the taking.” (Ibid.) “Thus,” the court concluded, “the gravamen of this cause of action for purposes of section 425.16 is the taking itself, not the reason for the taking which is alleged to have made the taking wrongful.” (Ibid.) The court reached the same conclusion with respect to the sister’s conversion cause of action. (Id. at p. 826.)

Similarly, in the present case, the alleged injury producing conduct was not the protected litigation activity that Boutin Jones undertook on behalf of the Old Grange, but the unprotected taking of money drawn from accounts that belonged to the New Grange. Although the cross-complaint alleges the money was used to fund litigation against the New Grange, there is no allegation that the litigation was the cause of any injury to the New Grange. Rather, similar to the claims in Greco, the alleged injury was solely the taking of money. (Greco, supra, 2 Cal.App.5th at p. 825.) That the money was used to fund litigation against the New Grange may have added insult to injury, but was not, itself, the injury.

Boutin Jones directs our attention to allegations the firm engaged in “a deliberate course of sandbagging on discovery,” and “actively concealed the fact that Boutin Jones was being paid from the [disputed] accounts,” necessitating the filing of a motion to compel. But the alleged injury producing conduct was not Boutin Jones’ discovery practices, which are obviously protected petitioning activities. (See, e.g., Kashian v. Harriman (2002) 98 Cal.App.4th 892, 908 [“Filing a lawsuit is an exercise of one’s constitutional right of petition, and statements made in connection with or in preparation of litigation are subject to section 425.16”].) Rather, as we have explained, the alleged injury producing conduct was the taking of money from accounts belonging to the New Grange, which was not protected activity. (See Greco, supra, 2 Cal.App.5th at p. 825.)

Finton Construction, Inc. v. Bidna & Keys, APLC (2015) 238 Cal.App.4th 200 (Finton Construction), on which Boutin Jones relies, does not compel a contrary conclusion. There, the defendants, a law firm and two lawyers (together, the attorney-defendants), represented former employees of the plaintiff, a construction company, in a case in which the former employees were alleged to have copied confidential documents onto a hard drive owned by the plaintiff. (Id. at pp. 204-206.) The former employees gave the hard drive to the attorney-defendants. (Id. at p. 206.) The plaintiff then sued the attorney-defendants for conversion, receipt of stolen property, and injunctive relief. (Id. at p. 207.)

The trial court granted the attorney-defendants’ special motion to strike (id. at p. 208), and the court of appeal affirmed, stating: “It is unquestionable and undisputed that the acts alleged in the complaint all arise out of defendants’ representation of their clients in the underlying case. The only reason the hard drive was ever turned over to defendants is because they were counsel in that matter. The only purported reason defendants are being sued is because they refused to unconditionally return the hard drive, which constitutes potential evidence in the underlying matter. In reality, it seems they are being sued for representing their clients.” (Id. at p. 210.)

Finton Construction does not help Boutin Jones. There, the property alleged to have been converted was evidence in the underlying litigation. By demanding the return of the hard drive, and challenging the attorney-defendants’ possession of it, the plaintiff was directly targeting their performance of a protected activity—i.e., defending their clients in litigation. Here, though Boutin Jones received fees for performing protected, litigation-related activities for the Old Grange, the firm’s receipt of fees was not inherently, substantively linked to the defense of the Old Grange, as the attorney-defendants’ receipt of the hard drive was in Finton Construction. Boutin Jones could have provided litigation services to the Old Grange on a pro bono or contingent fee basis, or could have required that fees be paid from another source of funds. Unlike the attorney-defendants’ receipt of the hard drive in Finton Construction, there was no necessary connection between Boutin Jones’ receipt of fees and the firm’s representation of the Old Grange. Finton Construction is therefore inapposite.

For all of the foregoing reasons, we conclude that Boutin Jones has failed to show the conversion cause of action arises from protected activity. It is therefore unnecessary to consider whether the New Grange can demonstrate a probability of prevailing on the merits of the conversion cause of action. (City of Cotati v. Cashman, supra, 29 Cal.4th at pp. 80-81.) As we shall see, an elements-based analysis of the New Grange’s cause of action for receiving stolen property yields a similar conclusion.

2. Receiving Stolen Property

The cause of action for receiving stolen property is based on Penal Code section 496, which provides for civil liability when a violation of subdivision (a) is found to have occurred. (Pen. Code, § 496, subd. (c); see generally Switzer v. Wood (2019) 35 Cal.App.5th 116, 126.) The elements of a violation of Penal Code section 496, subdivision (a) “are simply that (i) property was stolen or obtained in a manner constituting theft, (ii) the defendant knew the property was so stolen or obtained, and (iii) the defendant received or had possession of the stolen property.” (Switzer v. Wood, supra, at p. 126.)

We assume that most of the arguments discussed in the preceding analysis of the conversion cause of action apply equally to the cause of action for receiving stolen property, and reject those arguments for the reasons previously stated. This leaves us with Boutin Jones’ argument that the cause of action for receiving stolen property arises from protected activity because the firm only acquired knowledge the money was drawn from accounts belonging to the New Grange as a result of its protected, litigation-related activities on behalf of the Old Grange. This argument also lacks merit. Although Boutin Jones’ attorney-client relationship with the Old Grange may have provided the context in which the firm is alleged to have learned the money’s origin, this does not make the fact of that relationship necessary to prove the knowledge element of the cause of action for receiving stolen property. That Boutin Jones may have learned the money came from an improper source in the course of its representation of the Old Grange might provide evidence to support the cause of action for receiving stolen property in violation of Penal Code section 496, but would not be an essential element of that cause of action. We therefore conclude the cause of action for receiving stolen property does not arise from protected activity either. Having so concluded, we have no occasion to consider the merits of the cause of action.

For all of the foregoing reasons, we conclude the trial court did not err in denying Boutin Jones’ motion to strike with respect to the cause of action for receiving stolen property in violation of Penal Code section 496.

C. Policy Arguments

Finally, Boutin Jones argues the absence of an anti-SLAPP remedy against the New Grange’s claims would have a chilling effect on a client’s right of petition, “because attorneys would be unwilling to represent a client whose alleged liability in litigation potentially exceeds that client’s ability to pay any resulting judgment to the litigation adversary.” We have no quarrel with the notion that law firms may hesitate to represent clients facing significant liabilities, as such liabilities could render them unable to pay for legal services. But we struggle to understand how a law firm’s fear of being sued for attorneys’ fees received from an improper source burdens the client’s right of petition any more than any other constraint on the client’s financial ability to retain and pay for counsel. We are satisfied that Boutin Jones has failed to make the showing section 425.16 requires. (Paul v. Friedman (2002) 95 Cal.App.4th 853, 864 [“While we are required to construe the statute broadly, we must adhere to its express words”].) We therefore reject Boutin Jones’ policy arguments.

III. DISPOSITION

The order denying Boutin Jones, Inc.’s special motion to strike is affirmed. California State Grange shall recover its costs on appeal. (Cal. Rules of Court, rule 8.278(a)(1)&(2).)

/S/

RENNER, J.

I concur:

/S/

HULL, Acting P. J.

MAURO, J., Concurring.

I concur in the majority opinion but write separately to further address certain arguments asserted by appellant Boutin Jones Inc. (Boutin Jones).

Boutin Jones argued in its appellate briefs and at oral argument that because attorney’s fees help to fund protected litigation, and because funding litigation is itself protected, the attorney’s fees acquired by Boutin Jones should be protected in the first stage of the anti-SLAPP analysis (in which we consider whether the California State Grange (New Grange) allegations arise from Boutin Jones’s protected activity) and the anti-SLAPP analysis should proceed to the second step, in which New Grange would have the burden to establish a probability of prevailing on its claims. Boutin Jones asserted in oral argument that protecting attorney’s fees advances an important public policy.

In support of these arguments, Boutin Jones relies on two quotes from California Supreme Court decisions. In Rusheen v. Cohen (2006) 37 Cal.4th 1048, 1056, the Court stated: “Under Code of Civil Procedure section 425.16 ‘[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 . . . shall be subject to a special motion to strike. . . .’ [Citation.] . . . ‘Any act’ includes communicative conduct such as the filing, funding, and prosecution of a civil action. [Citation.]” (Italics added.) Later, in Baral v. Schnitt, supra, 1 Cal.5th 376, 381-382, the Court stated: “If the supporting allegations include conduct furthering the defendant’s exercise of the constitutional rights of free speech or petition, the pleaded cause of action ‘aris[es] from’ protected activity, at least in part, and is subject to the special motion to strike authorized by [Code of Civil Procedure] section 425.16[, subdivision ](b)(1).” (Italics added.)

I understand the arguments advanced by Boutin Jones, but I believe our resolution of this appeal must be guided by the analysis in the California Supreme Court’s subsequent decision in Park v. Board of Trustees of California State University (2017) 2 Cal.5th 1057 (Park). Among other things, in that case the Court explained that cloaking an allegedly wrongful act with the status of protected communicative activity could chill legitimate judicial oversight of potential abuses, and could inappropriately shift the burden of proof to the victim of the alleged wrong. (Id. at p. 1067.) Although Boutin Jones argues Park is distinguishable, I believe the comments in Park provide appropriate guidance as we consider the circumstances of this case, in which New Grange asserts causes of action for conversion and receipt of stolen property.

Of course, we are not called upon in this appeal to determine the proper disposition of the funds in question, and we express no opinion on that subject. Our focus is solely on whether New Grange’s cross-complaint asserts allegations arising from protected activity. Based on the comments in Park, supra, 2 Cal.5th 1057, I conclude it does not.

/S/

_________________________

MAURO, J.