Case Number: 18NWCV00181 Hearing Date: June 18, 2019 Dept: SEC

TREVINO v. TREVINO

CASE NO.: 18NWCV00181

HEARING: 06/18/19

JUDGE: LORI ANN FOURNIER

#1

TENTATIVE ORDER

Defendant Stoner’s motion to strike (Anti-SLAPP) pursuant to CCP 425.16 is DENIED.

Plaintiff to give NOTICE.

Defendant Stoner moves for an order striking Plaintiff’s Complaint pursuant to CCP 425.16.

The moving party bears the initial burden of showing that the action falls within the class of suits subject to the special motion to strike. (Matson v. Dvorak (1995) 40 Cal.App.4th 539, 548; Dixon v. Superior Court (1994) 30 Cal.App.4th 733, 742; Wilcox v. Superior Court (1994) 17 Cal.App.4th 809, 819.) A defendant need not first establish that his actions are constitutionally protected under the First Amendment as a matter of law. (Wilcox v. Superior Court, supra, 17 Cal.App.4th at 820.) However, a defendant is required to make a prima facie showing that plaintiff’s suit arises from any act of defendant in furtherance of his right to petition or his right of free speech under the federal or state constitution in connection with an issue of public interest. (CCP 425.16(e); Equilon Enterprises v. Consumer Cause (2002) 29 Cal.4th 53, 67.) The act which forms the basis for the plaintiff’s cause of action must itself have been an act in furtherance of the right of petition or free speech. (City of Cotati v. Cashman (2002) 29 Cal.4th 69, 76-78; ComputerXpress, Inc. v. Jackson (2001) 93 Cal.App.4th 993, 1003; Dowling v. Zimmerman (2001) 85 Cal.App. 4th 1400, 1417; Braun v. Chronicle Publishing Co. (1997) 52 Cal.App.4th 1036, 1043.)

A defendant may meet this burden by showing that the act which forms the basis for the plaintiff’s suit was (1) any written or oral statement made before a legislative, executive or judicial proceeding; (2) a statement or writing made in connection with an issue under consideration in such a proceedings or “any other official proceeding authorized by law;” (3) any written or oral statement 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 an issue of public interest. (CCP 425.16(e); Equilon Enterprises, supra, 29 Cal.4th at 66; Dixon v. Superior Court, supra, 30 Cal.App.4th at 742.)

Whether the anti-SLAPP statute applies is determined by the “principal thrust or gravamen” of Plaintiff’s claim. It cannot be invoked where allegations of protected activity are only incidental to a cause of action based on nonprotected activity. (Martinez v. Metabolife Int’l, Inc. (2003) 113 Cal.App.4th 181, 187.)

Defendant Stoner bears the burden of establishing that Plaintiff’s action falls within the class of suits subject to the special motion to strike. Stoner contends that Plaintiff’s causes of action for Breach of Fiduciary Duty, Conversion, Elder Abuse, and Violation of B&P Code 17200 arise from his representation of Stacy Trevino and R.S. Oliver, Inc. (dba Casa Garcia Mexican Food to Go) in anticipation of a lawsuit by Rick Trevino against the Corporation.

Stoner contends Peregrine Funding, Inc. v. Sheppard Mullin Richter & Hampton, LLP (2005) 133 Cal.App.4th 658 is instructive. There, the First District held that although the attorney’s conduct was couched in terms of a fiduciary breach, protected conduct included petitioning activities, such as opposing the SEC’s efforts to appoint a receiver, threatening the SEC with bankruptcy, and refusing to allow the individual client to testify.

In opposition, Plaintiff cites Sprengel v. Zbylut (2015) 241 Cal.App.4th 140, where the Second District declined to protect counsel’s litigation activities. The Sprengel court noted that although Sprengel’s claims may have been triggered by or associated with litigation activities, they do not arise out of those acts. Instead, they arise out of breach of professional obligations they allegedly owed to Sprengel as a result of the attorney-client relationship.

Plaintiff’s complaint alleges:

Plaintiff Rick Trevino (“Rick”) is 80 years old, and a shareholder and Director of Casa Garcia.

Stacy Trevino (“Stacy”) is the Chief Financial Officer and shareholder of Casa Garcia.

Nicole Trevino (“Nicole”) is the Chief Operating Officer and purported shareholder of Casa Garcia.

On or about February 2018 or earlier, Stacy began taking the cash receipts from Casa Garcia and not properly accounting for the cash receipts; Nicole aided and abetted Stacy.

Stoner was corporate counsel for Casa Garcia and individual counsel for Stacy.

Stoner aided and abetted Defendants in making false statements regarding the cash receipts of Casa Garcia, and concealing the truth.

Stoner has an actual conflict of interest with Rick, who has interests adverse to Nicole and Stacy, who are also Shareholders, Officers, and Directors of Casa Garcia.

Stoner failed to obtain a written waiver of the conflict of interest as required by Rule 1.7 of the Rules of Professional Conduct.

Stoner provided advice to support Defendants in breaching their fiduciary duties to Casa Garcia and Plaintiff.

Stoner knew Stacy and Nicole were being overpaid, but failed to take appropriate action as corporate counsel to stop the overpayments.

Stoner knew that Stacy and Nicole were failing to properly report and/or account for the cash receipts of Casa Garcia, and aided and abetted Stacy and Nicole.

In doing the aforementioned acts, Stoner aided and abetted in conversion, elder abuse, and unfair business practices.

Based on the allegations, the court finds the gravamen of the complaint is for breach of fiduciary duty, and outside the protections of the anti-SLAPP statute. Unlike Peregrine Funding, Inc. v. Sheppard Mullin Richter & Hampton, LLP, the complaint does not allege any petitioning activities like threatening to file for bankruptcy or refusing to allow the client to testify. Instead, the allegations in the complaint allege Stoner’s breach of loyalty and confidentiality, which is more analogous to Sprengel v. Zbylut. Stoner’s acts arise out of breach of professional obligations he allegedly owed to the corporation as a result of the attorney-client relationship. Casa Garcia is a closed corporation with only three principals, two of whom are defendants in this action and alleged to have embezzled corporate monies. Stoner does not owe a duty of loyalty to only two of the three shareholders of the corporation, but owes a duty to the entire corporation, to protect the interest of the corporation and its shareholders, which also includes Plaintiff Rick Trevino.

An action based on a breach of an attorney’s professional or ethical duty is outside the protections of the anti-SLAPP statute. (Castleman v. Sagaser (2013) 216 Cal.App.4th 481, 492; Benasra v. Mitchell Silberberg & Knupp LLP (2004) 123 Cal.App.4th 1179, 1189; Loanvest I, LLC v. Utrecht (2015) 235 Cal.App.4th 496, 504; Freeman v. Shack (2007) 154 Cal.App.4th 719, 732.)

Here, the complaint alleges that Stoner aided and abetted Nicole and Stacy in breaching their fiduciary duties to the corporation, an entity in which Rick is a shareholder and Director. By aiding and abetting Stacy and Nicole’s actions, and concealing the embezzlements, Stoner has an actual conflict of interest with Casa Garcia. The allegations referring to an arguably protected activity (i.e. providing advice) are only incidental to the nonprotected activity (i.e. aiding, abetting, and concealing the embezzlement of corporate funds, and overpayments to employees, which further diminishes corporate funds).

Thus, the court finds that Stoner failed to carry his initial burden, and the motion is DENIED.