2018-00229257-CU-FR

Palmer Law Group vs. Cornerstone Valuation, LLC

Nature of Proceeding: Motion to Strike (SLAPP)

Filed By: Burlingham, Steven R.

The Special Motion to Strike pursuant to Code of Civil Procedure section 425.16, filed by Defendant Cornerstone Valuation LLC, is ruled upon as follows.

The Court declines the request by Plaintiffs Palmer Law Group and William W. Palmer to continue the hearing or allow Plaintiffs to file an additional opposition. Plaintiffs’ request is largely premised on unsubstantiated allegations of a conflict of interest on the part of defense counsel Steven Burlingham. Plaintiffs have not established the existence of a conflict, let alone that any such purported conflict impacts the Court’s consideration of a special motion to strike. Plaintiffs prepared, filed and served an opposition to the motion, which, albeit untimely, the Court has considered in issuing its ruling. No continuance is warranted or justified.

FACTS

As best as the Court can discern from Plaintiffs’ muddled complaint, this matter pertains to Plaintiffs’ representation of Mark Robinson regarding general business matters for Robinson’s business, Cornerstone Valuation, LLC. Cornerstone is or was dedicated to the recovery of unclaimed property from the State of California. Cornerstone researched unclaimed assets of certain value to yield a finder’s fee: Cornerstone would contact the owner of the claim, obtain the owner’s signature on a Recovery Authorization Contract, assemble a State Controller’s Officer Claim Packet and deliver to the State Controller’s Office, which would then pay a finder’s fee.

According to Plaintiff, Attorney Burlingham represented Robinson in divorce proceedings. Plaintiffs allege that Robinson became indebted to Burlingham for the latter’s legal services. As a result, according to Plaintiffs, they performed unclaimed property work on various projects for Cornerstone. Plaintiffs allege that Robinson promised Burlingham the same funds that Plaintiff generated working on the projects as payment for Robinson’s divorce proceedings. Plaintiffs contend that both Burlingham and Robinson made false statements to the State Controller’s Office regarding a claim for law firm Lewis Brisbois Bisgaard & Smith LLP, which caused Plaintiff not to receive a finder’s fee because the finder’s fee was instead paid to Defendant or to Robinson/Burlingham. Plaintiffs further allege that Defendant, acting through Robinson, and Burlingham attempted to destroy Plaintiff’s longstanding relationship with the Controller’s Office.

The Court notes that precisely these same allegations — together with essentially the same causes of action for declaratory relief and fraud – were presented in a lawsuit that Plaintiffs filed in 2017. (Sacramento Superior Court Case No. 34-2017-

00221282.) While Plaintiffs have added additional allegations regarding advancing Robinson money and paying for certain personal expenses of Robinson, the allegations too are essentially the same as the prior lawsuit. In fact, in most instances, the lawsuit is verbatim identical to the Complaint filed in the prior litigation. The primary difference between the two lawsuits is that here Plaintiffs sue Cornerstone Valuation as the sole named Defendant, while in the first action, they sued Burlingham as acting on behalf of Robinson and Cornerstone. That said, the Complaint in the prior action was also subject to a special motion to strike under Code of Civil Procedure section 425.16, which Plaintiffs then did not substantively oppose.

On March 3, 2018, Department 54 of this Court affirmed its tentative ruling, which granted the motion to strike. There, the Court concluded as follows:

CCP §425.16(e)(2) provides that a protected speech is “any writing. . . made i connection with an issue under consideration by a legislative, executive, or judici body, or any other official proceeding authorized by law.” Defendant advances th the complaint arises from protected activity because it is predicated on statemen made to the State Controller’s Office regarding the Lewis Brisbois claim.

The Court agrees with Defendant. As explained in Robinson’s declaration, o March 1, 2017, Defendant wrote a letter to Timothy Graves, Lewis Brisboi managing partner, requesting that he sign the completed SCO Claim Packet. M Graves signed the SCO Claim Packet and Robinson took the SCO Claim Pack and the RAC to the State Controller’s Office and filed it. In early April 201 Plaintiff attempted to reach Robinson by phone and threatened to sue him. In Ma 2017, Plaintiff submitted a similar claim packet to the State Controller’s Offic representing to the State Controller’s Office that he represente Robinson/Cornerstone. The State Controller’s Office first issued a finder’s fe warrant payable to Cornerstone. Plaintiff communicated to the State Controller Office that there was an attorney’s fee lien for the fees and costs and had th warrant reissued “C/O” his firm name. The claim that he had an attorneys’ fee lie was false. The State Controller’s Office issued a check to Plaintiff’s office. Plainti claimed one-half of the finder’s fee and remitted one-half to Robinson. Considerin this evidence, the Court concludes that the complaint arises from the Lew Brisbois Claim Packet submitted to the State Controller’s Office.

(March 6, 2018 Order [citations omitted].)

Plaintiff filed the instant lawsuit on March 16, 2018. As in the prior lawsuit, Plaintiffs make the following assertions as to each cause of action:

· First Cause of Action (Declaratory Relief [2017 and 2018 Complaints): Plaintiffs allege “[a] real and actual controversy … concerning whether Cornerstone’s right [which were “Burlingham’s rights” in the prior litigation] and duties to receiv unearned payments for Plaintiffs’ work, and whether Cornerstone [previousl Burlingham] has a duty to reimburse Plaintiffs for the lost benefit of the unpaid wor including the roughtly ten (10) cases listed above [which pertain to unclaime property held by the State Controller’s Office].” Compl. ¶ 49 (compare ¶ 36 of 201 lawsuit).

· Second Cause of Action (Breach of Contract): In this instance, Plaintiffs allege

breach of contract as opposed to the 2017 lawsuit, in which Plaintiffs allege tortious interference with business relations. Of note, however, is that both lawsui contain allegations that Defendant filed knowingly false declarations, blocke Plaintiff’s completion of Cornerstone’s projects, and engaged in conduct in a attempt to destroy Plaintiff’s business and reputation. (Compare Compl. ¶ 53 an subparas., with 2017 lawsuit ¶¶ 40-44.)

· Third Cause of Action (Breach of the Implied Covenant of Good Faith and Fair Dealing): Here, Plaintiffs claim that “Defendant [Cornerstone] breached its duty o care when it deliberately disrupted Plaintiffs’ work and ability to be paid, attempte to block payment as promised, falsely claimed that work was provided by anothe attorney Burlingham, and issued knowingly false statements that included efforts t disrupt or divert payments issued by the Controller’s office[.]” (Compl. ¶ 58.)

· Fourth Cause of Action (Fraud [Third Cause of Action in 2017 Complaint]): Plaintiffs allege that Cornerstone (Burlingham and /or Robinson in the 201 Complaint) “knowingly made false statements in an effort to induce Plaintiff t perform work and provide benefits.” (¶ 61.) Both Complaints allege that Robinso “stated to the Controller’s staff that Plaintiffs did not represent Cornerston [Robinson], though Robinson … authorized the claim filing and tracked its progres through completion.” (Id.) Plaintiffs further allege that Robinson “contacted th Controller’s officer before receipt of the July 17, 2017 letter to Lewis Brisbois, an then attempted to steer all payments to Robinson and/or Burlingham on behalf o Cornerstone.” (Id.[compare ¶ 46 of 2017 Complaint].) Further, Plaintiffs allege tha “Robinson and/or Burlingham presented an incomplete claim package to th Controller’s staff dated April 2017 that was never filed, with a claim form dated Apr 5, 2017, showing Burlingham’s purported representation of Robinson an Cornerstone Valuation, LLC. But Burlingham did not submit the claim form to th Controller[.]” (Compl. ¶ 62 [compare¶ 47 of 2017 Complaint].) In addition “Burlingham and Robinson concocted this scheme … to mislead and defraud th Courts and to defraud the Controller and Plaintiffs. With full knowledge of th above, Burlingham and Robinson attempted to force the Controller to issue new checks to Robinson and Cornerstone, while simultaneously demanding tha Plaintiffs issue Robinson a payment from the same funds for a double collection.” (Compl. ¶ 63 [compare 2017 Complaint at ¶ 49].)

LEGAL STANDARD

A SLAPP suit – a strategic lawsuit against public participation – seeks to chill rights to free speech or petition by dragging the speaker or petitioner through the litigation process, without genuine expectation of success in the suit. The Legislature enacted section 425.16 to provide a summary disposition procedure for SLAPP claims. Accordingly, section 425.16 authorizes courts, upon motion by anyone who claims to be the target of a SLAPP suit, to probe the basis for any cause of action allegedly arising from protected communicative activities, and to strike it if the claimant cannot show minimal merit. “[T]he statutory remedy afforded by section 425.16 extends to statements and writings of governmental entities and public officials on matters of public interest … that would fall within the scope of the statute if such statements were made by a private individual or entity.” (Vargas v. City of Salinas(2009) 46 Cal.4th 1, 17.)

Saliently, California Code of Civil Procedure Section 425.16, provides, in part: “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.” CCP § 425.16(b)(1). An “‘act in furtherance of a person’s right of petition or free speech . . . 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; (4) or 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.” CCP § 426.16(e).

The statute establishes a two-step process for determining whether an action is a strategic lawsuit against public participation (SLAPP). The court first decides whether the defendant has made a threshold showing that the challenged cause of action is one “‘arising from’” protected activity. (City of Cotati v. Cashman(2002) 29 Cal.4th69, 76.) The moving defendant must demonstrate that the act or acts of which the plaintiff complains were taken “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[.]” (Code Civ. Proc. § 425.16 (b)(1); seeEquilon Enterprises v. Consumer Cause, Inc.(2002) 29 Cal.4th 53, 67. )Section 425.16(e), clarifies what speech constitutes an “act in furtherance of a person’s right of petition or free speech under the United States or California Constitution … Such speech 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.”(Grenier v. Taylor(2015) 234 Cal.App.4th 471, 480-481 (citing and quoting CCP § 425.16(e)). Only if the court concludes that this preliminary showing has been made must it then determine whether the plaintiff or cross-complainant has demonstrated a probability of prevailing on the claim. (SeeNavellier v. Sletten (2002) 29 Cal.4th 82, 88.)

It is the principal thrust of the plaintiff’s cause of action that determines whether the anti-SLAPP statute applies, and when the allegations referring to arguably protected activity are only incidental to a cause of action based essentially on non-protected activity, collateral allusions to protected activity should not subject the cause of action

to the anti-SLAPP statute.(Martinez v. Metabolife Internat., Inc.(2003) 113 Cal.App.4th 181, 188; seeBaral v. Schnitt(2016) 1 Cal.5th 376, 394.) The Court’s preliminary inquiry in an action such as the instant matter is to determine exactly what act is being challenged by the plaintiff; to do so, the Court primarily reviews the operative complaint, as well as the papers filed in opposition to the motion to the extent that they might give meaning to the words in the complaint. (Code Civ. Proc. §

425.16(b); Dible v. Haight Ashbury Free Clinics, Inc.(2009) 170 Cal.App.4th 843, 849; see Navellier, supra, 29 Cal.4th at 89.)

DISCUSSION

Code Civ. Proc. § 425.16 (e) provides: “As used in this section, 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: “(1) any written or oral statement or writing made before a legislative, executive, or judicial proceeding, orany 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, orany 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; (4) or 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.” (Italics added.) A defendant who invokes either subparagraph (1) or (2), above, need not “separately demonstrate that the statement concerned an issue of public significance.” (Briggs v. Eden Council for Hope & Opportunity (1999) 19 Cal.4th 1106, 1123.)

However, as the California Supreme Court has recently observed, “a claim is not subject to a motion to strike simply because it contests an action or decision that was arrived at following speech or petitioning activity, or that was thereafter communicated by means of speech or petitioning activity. Rather, a claim may be struck only if the speech or petitioning activity itself is the wrong complained of, and not just evidence of liability or a step leading to some different act for which liability is asserted.” (Park v. Board of Trustees of California State University(2017) 2 Cal.5th 1057, 1060; see Greco v. Greco(2016) 2 Cal.App.5th 810, 819-820;Ulkarim v. Westfield LLC(2014) 227 Cal.App.4th 1266, 1274;Baral, supra, at 394.) “ ‘In order for a complaint to be within the anti-SLAPP statute, the “critical consideration is whether the cause of action is based on the defendant’s protected free speech or petitioning activity.” [Citation.] To make that determination, we look to the “principal thrust or gravamen of the plaintiff’s cause of action.” [Citations.]’ ” (Central Valley Hospitalists v. Dignity Health(2018) 19 Cal.App.5th 203, 217; Ulkarim, supra, at p. 1274.)

Thus, “[a] claim arises from protected activity when that activity underlies or forms the basis for the claim.” (Park v. Board of Trustees of California State University, supra, at p.1062.) “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 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.) “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.” (Hylton v. Frank E. Rogozienski, Inc.(2009) 177 Cal.App.4th 1264, 1272; see City of Colton v. Singletary (2012) 206 Cal.App.4th 751, 767.)

Here, the Court here concurs with Defendant and with the conclusion reached by Judge Krueger in the 2017 lawsuit: namely, that the principal thrust of Plaintiff’s lawsuit arises from protected activity because it is based on and directly connected to statements made to and interactions with the State Controller’s Office regarding the unclaimed property matters in general. These alleged activities include filing false

declarations, blocking Plaintiff’s work on State Controller’s Office projects, blocking or diverting payment from the State Controller’s Office, and making false statements to the State Controller’s Office. Considering these facts, the Court concludes that, once again, the Complaint arises from the claim packets submitted to, or intended for, the State Controller’s Office. Such matters satisfy the criteria contained in section 425.16 (e)(2), specifying that protected speech is any writing or statement made in connection with matters under consideration “by a legislative, executive, or judicial body, or any other official proceeding authorized by law.”

Since Defendant has made the required threshold showing, the Court must consider whether Plaintiffs demonstrate a probability of prevailing on their claims. The trial court must deny an anti-SLAPP motion if “the plaintiff presents evidence establishing a prima facie case which, if believed by the trier of fact, will result in a judgment for the plaintiff.” (Robinzine v. Vicory(2006) 143 Cal.App.4th1416, 142; see CCP § 425.16(b)

(1).) From a substantive standpoint, Plaintiffs have proffered very little to oppose the motion. Indeed, a significant portion of Plaintiffs’ opposition is devoted to their contention that the anti-SLAPP motion itself should be stricken because defense counsel Burlingham has a purported conflict of interest – a matter which is separate and irrelevant to the Court’s consideration of an anti-SLAPP motion. Despite filing a volume of documents, Plaintiffs have failed to establish a probability of success on the merits. For example, Plaintiffs claim to have undertaken significant legal work on behalf of Robinson, but do not submit any billing statements or even a written fee agreement between Plaintiffs and Robinson to substantiate this claim. Simply stated, Plaintiffs do not substantively address any facts or evidence that show their probability of prevailing on their claims. Instead, they have filed a significant amount of documents with the Court and, without any analysis or argument, improperly expect the Court to do their work for them and attempt to determine the relevancy and import of those documents. It is a burden for Plaintiffs, not the Court, to show a likelihood of success on the merits of their claims. Having failed to do so, the Court must conclude that Plaintiff cannot prevail on the causes of action in the Complaint and the special motion to strike should be granted.

Finally, the Court also notes that filing a separate and second lawsuit alleging the very same facts and circumstances as the prior lawsuit is an abuse of the Court’s time and resources.

Based on the foregoing, Defendant’s motion to strike is GRANTED.

A prevailing Defendant on a motion to strike must file a separate noticed motion to recover their attorneys’ fees and costs.