Albright, Yee & Schmit, APC v. Zweiback
| Docket Number | B315967 |
| Decision Date | 01 December 2023 |
| Parties | ALBRIGHT, YEE & SCHMIT, APC, et al., Plaintiffs and Respondents, v. MICHAEL ZWEIBACK et al., Defendants and Appellants. |
| Court | California Court of Appeals Court of Appeals |
NOT TO BE PUBLISHED
APPEAL from an order of the Superior Court of Los Angeles County. No. 20STCV45860 Elaine Lu, Judge. Affirmed.
Klinedinst, Heather L. Rosing and Harold C. Trimmer for Defendants and Appellants.
Law Office of Albert Robles and Albert Robles for Plaintiffs and Respondents.
Michael Zweiback, Rachel L. Fiset, Erin Perez-Coleman, and their law firm, Zweiback, Fiset &Coleman LLP (the qui tam lawyers) filed a qui tam action against Clifton Albright and his law firm, Albright, Yee & Schmit, APC (Albright).[1] The complaint alleged Albright had bribed public officials to retain him as counsel. After the court dismissed Albright from the case, he filed the present action against the qui tam lawyers.
The qui tam lawyers moved to dismiss Albright's complaint under California's anti-strategic lawsuit against public participation (anti-SLAPP) statute (Code Civ. Proc., § 425.16).[2] The trial court granted the motion in part, finding Albright had shown a probability of prevailing on only a single claim for malicious prosecution.
On appeal, the qui tam lawyers argue the court should have dismissed the entire complaint. They contend the court erred because Albright presented insufficient evidence showing they lacked probable cause to pursue the underlying action or that they acted with malice. We affirm.
The West Valley Water District (the Water District) provides water service to several cities and unincorporated areas of San Bernardino and Riverside Counties. Five elected members of the Board of Directors (the Board) oversee and govern the Water District.
In early 2018, the Water District retained Albright to provide it with general legal advice. Clifford Young was president of the Board at the time, and he approved and signed a retainer agreement with Albright. The Water District subsequently engaged Albright to work on several matters, some of which involved complaints against Young.
In January 2019, Patricia Romero-who was the Water District's Assistant Board Secretary-sent a letter to the San Bernardino County District Attorney, in which she alleged Board members had used an illegal motion to overthrow Young and install Michael Taylor as Board president. She also alleged that, since Taylor had taken over, she had observed "multiple illegal activities," including attempts to extort $50 million of public funds from the Water District.
A month later, in February 2019, Young, Romero, and the Water District's Chief Financial Officer, Naisha Davis, (the qui tam plaintiffs) filed a qui tam action against several individuals and companies associated with the Water District, including Albright.[3] The qui tam lawyers filed the complaint on behalf of the qui tam plaintiffs.
The qui tam complaint alleged generally that Water District directors, executives, employees, and vendors were engaged in a conspiracy involving bribes and kickbacks. Among other individuals, the complaint identified as Albright's co-conspirators Michael Taylor (Water District Board President), Ricardo Pacheco (Water District Assistant General Manager), and Robert Tafoya (Water District General Counsel).
As to Albright specifically, the complaint alleged he submitted and conspired to submit false claims to the Water District, in violation of California's False Claims Act (the CFCA). The complaint alleged as follows: In September 2018, General Counsel Tafoya proposed to Young that the Water District engage Albright to handle new pending litigation against the Water District. In return, Tafoya said Albright would make a $2,000 donation to Young's campaign fund. Young rejected the offer. Nevertheless, the Water District engaged Albright to handle the matter. Albright subsequently made $1,000 political contributions to two Board members. The complaint concluded that, "[a]s a result of illegal kickbacks and bribes, the Board has approved Albright's invoices, of at least, $187,151."
Albright demurred, asserting the qui tam plaintiffs failed to allege he made a single false claim. According to Albright,
Around this time, the Water District intervened in the case and moved to dismiss the qui tam complaint on the basis that it "is frivolous, vexatious and brought solely for the purpose of harassment."[4] The Water District suggested Young had "hijacked" the CFCA "to interfere with ongoing investigations of harassment, bullying and misappropriation of public monies" against him. The Water District also noted the qui tam lawyers were representing Young in connection with those investigations.
At a February 2020 hearing, the trial court found the allegations of kickbacks, bribes, and false claims were "bare bones" and not pleaded with the requisite particularity. The qui tam lawyers argued their allegations were sufficient because, had the Water District engaged Albright "based on a kickback or a bribe, even if the invoice is accurate, it is based on fraudulent activity and it is a false claim." The court responded, "If you want to get past the pleading stage, you have to lay out the facts that support it." The qui tam lawyers represented they could "add more particularity as details and investigations relating to state audits and other information." Based on that representation, the court granted them leave to amend.
The qui tam plaintiffs filed an amended complaint under seal in March 2020. The amended complaint omitted Albright and several other defendants named in the original complaint. However, the qui tam plaintiffs did not file a request to dismiss any of the unnamed defendants, including Albright.
In November 2020, the Water District and Albright filed a stipulation agreeing to dismiss Albright. A few days later, the court dismissed Albright with prejudice.
About a month later, in December 2020, Albright filed a complaint against the qui tam plaintiffs and the qui tam lawyers. The complaint asserted five causes of action: (1) malicious prosecution; (2) abuse of process; (3) defamation; (4) negligent interference with economic advantage; and (5) intentional interference with economic advantage. As to the qui tam lawyers, the complaint alleged they filed the action without conducting a reasonable investigation and with no good faith basis for believing Albright had violated the CFCA.
The qui tam lawyers filed an anti-SLAPP motion seeking to dismiss Albright's complaint.[5] According to the motion, the factual allegations in the qui tam complaint were premised "entirely on the personal observations, investigations, and documents of the [qui tam plaintiffs], and the lawsuit was filed because the [qui tam plaintiffs] were, up until that point, unsuccessful in their efforts to end the misconduct."
The qui tam lawyers argued the overarching scheme alleged in the qui tam complaint was corroborated by the fact that two alleged qui tam co-conspirators, Tafoya and Pacheco, were under federal investigation. They also argued the complaint was corroborated by a June 2020 audit by the California State Controller. The audit found the Water District The audit listed eight law firms, including Albright, with whom the Water District had contracted between 2016 and 2020.
With respect to Albright's malicious prosecution claim- which is the only claim at issue in this appeal-the qui tam lawyers argued Albright could not show they lacked probable cause to file the qui tam action or that they acted with malice. The lawyers asserted their claims against Albright had merit, but the trial court erroneously "held that exchanging a campaign contribution for public employment does not constitute a FCA violation under state law absent an allegation that the legal services were not actually provided or were overbilled." Because of this legal error, the court never considered the "key fact" supporting their claims: "that Mr. Tafoya relayed an offer by Albright to exchange a campaign contribution to a District Board Member in exchange for the Board Member's vote to engage him with District funds ...."
In support of their motion, the qui tam lawyers submitted declarations from Young, Davis, and Romero. Each qui tam plaintiff asserted they believed the allegations in the qui tam complaint were true based on their personal observations and investigations, and the documents they had seen. The individual lawyers who represented the qui tam plaintiffs also submitted declarations stating they had no ill feelings towards Albright or a motive to file the lawsuit, other than to advocate on behalf of their clients.
Albright opposed the motion, pointing out the qui tam lawyers failed to submit any evidence as to what they knew, what research they performed, or what...
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