Kimes v. Stone, 94-17210

Decision Date22 May 1996
Docket NumberNo. 94-17210,94-17210
Parties, 34 Fed.R.Serv.3d 1603, 96 Cal. Daily Op. Serv. 3594, 96 Daily Journal D.A.R. 5824 W. Michael KIMES; J. Colette Boykin, Plaintiffs-Appellants, v. Peter G. STONE, Judge, Superior Court; Robert L. Mezzetti, II; Henry Mariani; Robert Machado, Defendants-Appellees.
CourtU.S. Court of Appeals — Ninth Circuit

Robert H. Gonzales, Laguna Niguel, California, for plaintiffs-appellants.

Barbara H. Choi and Lisa B. Berkowitz, Deputy County Counsel, San Jose, California, for defendant-appellee Stone.

William J. Elfving and David P. Eby, Hoge, Fenton, Jones & Appel, San Jose, California, for defendants-appellees Mezzetti, Mariani and Machado.

Appeal from the United States District Court for the Northern District of California; James Ware, District Judge, Presiding. D.C. No. CV-94-20626-JW.

Before: NORRIS and WIGGINS, Circuit Judges, and JONES, * District Judge.

WIGGINS, Circuit Judge:

OVERVIEW

W. Michael Kimes and J. Colette Boykin, brother and sister, (collectively "Kimes") brought a claim in the United States District Court for the Northern District of California under 42 U.S.C. § 1983 against Santa Clara County Superior Court Judge Peter Stone ("Judge Stone") and attorneys Robert L. Mezzetti, Henry Mariani, and Robert Machado ("the Attorney Defendants"). Kimes' complaint alleged that Judge Stone and the Attorney Defendants conspired against Kimes in estate litigation in state court to "overturn" a jury verdict, thus depriving Kimes, without due process of law, of property he would have otherwise received from his father's estate. The district court granted Judge Stone's and the Attorney Defendants' motions to dismiss pursuant to Fed.R.Civ.P. 12(b)(6), relying on Cal.Civ.Code § 47(b), which immunizes parties involved in litigation from civil liability for communications made in the course of that litigation. We have jurisdiction pursuant to 28 U.S.C. § 1291 and affirm the dismissal in favor of Judge Stone and reverse the dismissal in favor of the Attorney Defendants.

FACTS

The following is based entirely on Kimes' complaint and the exhibits attached thereto.

Kimes brought suit against his stepmother, Marie Kimes ("Marie") in Santa Clara County Superior Court, alleging that she had induced Kimes' terminally ill father to draft a will and trust disinheriting Kimes. Kimes' brother, Kevin Kimes ("Kevin"), was also named as a defendant. Judge Taketsugu Takei presided over an almost four week jury trial, and on July 11, 1990, the jury returned a verdict, finding that Marie had used fraud and undue influence in inducing Kimes' father to sign the will and trust. The jury set aside the will and trust, but did not grant any damages to Kimes. During the trial, Kimes was represented by Mariani, his co-plaintiff sister was represented by Mezzetti, and Kevin was represented by Machado.

As a result of the verdict, the estate became intestate, subject to division pursuant to the California Probate Code. Soon after the verdict, an Internal Revenue Service ("IRS") lawyer met with counsel for all parties, advising them that the IRS intended to impose a substantial tax assessment against the decedent's estate because the will and trust had been set aside, and therefore did not qualify for the marital deduction. The Attorney Defendants and attorneys for Marie had begun settlement negotiations to decide how the estate property would be divided, and the IRS lawyer purportedly told them that the case should not be settled without IRS participation.

Pursuant to the jury verdict, Judge Takei issued an interlocutory order on August 20, 1990 declaring the will and trust null and void and imposing a constructive trust upon Marie. Marie filed a Motion for New Trial/JNOV on October 2, 1990, which was taken under submission by Judge Takei on October 26, 1990. Judge Takei failed to rule on the motion within sixty days, so the motion was denied as a matter of California procedural law.

Settlement negotiations continued among the Attorney Defendants, without the participation of the IRS. The attorneys apparently came to an agreement, and Kimes was informed "only that Marie Kimes had agreed to pay $2.4 Million ... to them and that they would work out the details." Compl. at 4 (emphasis in original). Without Kimes' knowledge, "a transfer to a different judge was being maneuvered" by the Attorney Defendants. Id. Unbeknownst to Kimes, the case was transferred by Judge Takei to Judge Stone on February 25, 1991.

According to the complaint, the Attorney Defendants "entered into a private extra-judicial agreement with Judge Stone to have the case transferred to him" from Judge Takei as part of a scheme by the Attorney Defendants to avoid the IRS tax liability, and to create an emotional distress award which would not be taxable and from which the attorneys would receive a large contingency fee. Id. at 5-6. 1 According to the complaint On March 25, 1991, Judge Stone issued a ruling on the Motion for New Trial/JNOV, declaring that the will and trust were valid, but awarding Kimes $2.4 million for emotional distress damages. Because Kevin's testimony at trial had helped convince the jury that Kimes' father did not intend to disinherit him, the Attorney Defendants advised Kimes to enter into a sharing agreement with Kevin regarding the $2.4 million award, under which Kevin would receive the share of his father's estate provided for in the will and trust.

                the Attorney Defendants knew that the Motion for New Trial/JNOV would be denied as a matter of law after sixty days, and that any ruling after that date would be void because of the court's lack of jurisdiction.   Nonetheless, the Attorney Defendants "agreed and conspired to draft in their own language, a 'Ruling' that was purportedly to emanate from Judge Stone."   Id. at 6.   In support of his claim, Kimes attached to his complaint a letter from Attorney Mezzetti to Marie's attorney (with copies to Attorneys Mariani and Machado) which included a draft of the proposed order by Judge Stone, purportedly drafted by the Defendant Attorneys, which is virtually identical to the order issued soon afterward by Judge Stone.  "All four of the defendants ... had specific knowledge the 'Ruling' was fraudulent, lacking in jurisdiction and lacking any legal support whatsoever ... yet they all ... created the appearance of having a 'hearing' on [the motion] to attempt to give legitimacy to their scheme."   Id
                

"The IRS found out about the legal maneuvering of the attorneys and filed a $1.7 Million ... lien on the estate" of the decedent. Id. at 7. Shortly thereafter, Marie filed for Chapter 11 bankruptcy to prevent foreclosure on the estate property because of the tax lien and the $2.4 million judgment. In addition, Marie sued Kimes to set aside a Stipulation that was part of the $2.4 million judgment and provided the terms for payment of the judgment.

Marie entered into a settlement with the IRS and the State of California, agreeing to pay a total of $447,000 in taxes from the estate. The estate has incurred over $100,000 in fees as a result of the proceeding, and Kimes has incurred substantial attorney's fees in defending the lawsuit by Marie, in protecting the interests of the estate, and in defending a lawsuit filed by Kevin at the insistence of the Attorney Defendants to enforce the sharing agreement regarding the $2.4 million judgment. Kimes was paid approximately $800,000 of the $2.4 million judgment from his mother, and the Attorney Defendants each received approximately $100,000 of the $800,000 as part of their contingency fee. The estate is currently in bankruptcy, and Kimes expects the litigation to continue.

PROCEDURAL HISTORY

On September 13, 1994, Kimes brought suit against Judge Stone and the Attorney Defendants for damages in the United States District Court for the Northern District of California, alleging that Judge Stone's and the Attorney Defendants' conduct deprived them "of their civil rights guaranteed under the Constitution," by depriving them of property rights in their father's estate and causing the unwarranted imposition of state and federal taxes in violation of 42 U.S.C. §§ 1983, 1985, and 1986. Id. at 13. The complaint also alleges that Kimes did not learn of the conspiracy until mid-June 1994.

On October 24, 1994, Judge Stone filed a motion to dismiss pursuant to Fed.R.Civ.P. 12(b)(6) on the grounds that the complaint did not satisfy Fed.R.Civ.P. 8(a), that Kimes' action was barred by the statute of limitations, and that Judge Stone enjoys absolute immunity for acts undertaken in his judicial capacity. The Attorney Defendants joined in Stone's motion, and also moved for dismissal on the ground that their actions were protected by Cal.Civ.Code § 47, the litigation privilege. Kimes withdrew his claims under 42 U.S.C. §§ 1985 and 1986, and opposed the Attorney Defendants' motion, arguing with respect to § 47(b) only that the Attorney Defendants' conspiring with Judge Stone did not qualify as a "communication" immunized by § 47(b). On December 1, 1994, the district court granted Judge Stone's and the Attorney Defendants' motions to dismiss,

finding that Kimes' claim was barred by Cal.Civ.Code § 47(b).

DISCUSSION

Kimes appeals the district court's dismissal of his 42 U.S.C. § 1983 claim, arguing that the district court erred in determining that the litigation privilege provided for by Cal.Civ.Code § 47(b) barred Kimes' claim. Kimes' counsel conceded at oral argument that Kimes' claim against Judge Stone is barred by judicial immunity, 2 and we thus affirm the district court's dismissal in favor of Judge Stone. We find, however, that the district court erred in applying Cal.Civ.Code § 47(b) as a bar to Kimes' § 1983 claim against the Attorney Defendants, and finding no other basis for affirming the district court, we reverse the dismissal in favor of the Attorney De...

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