Clarity Co. Consulting, LLC v. Gabriel
Decision Date | 12 April 2022 |
Docket Number | 2d Civil No. B311823 |
Citation | 77 Cal.App.5th 454,292 Cal.Rptr.3d 532 |
Parties | CLARITY CO. CONSULTING, LLC, Plaintiff and Respondent, v. Larry GABRIEL, Defendant and Appellant. |
Court | California Court of Appeals Court of Appeals |
Jenkins Mulligan & Gabriel and Daniel J. Mulligan, for Defendant and Appellant.
Keller, Fishback & Jackson and Stephen M. Fishback, Dan C. Bolton ; The Arkin Law Firm and Sharon J. Arkin, for Plaintiff and Respondent.
This appeal illustrates an attorney's misuse of the anti-SLAPP statute. ( Code of Civ. Proc. § 425.16.)1 "[H]owever efficacious the anti-SLAPP procedure may be in the right case, it can be badly abused in the wrong one, resulting in substantial cost—and prejudicial delay." ( Grewal v. Jammu (2011) 191 Cal.App.4th 977, 981, 119 Cal.Rptr.3d 835.) This is the wrong case. Appellant was given more than adequate notice in the trial court that his anti-SLAPP motion was not designed for this contractual dispute. He has been given the same notice on appeal. The warnings should have given him pause. They did not.
What we said over twenty years ago is as true today as it was then: ( Estate of Gilkison (1998) 65 Cal.App.4th 1443, 1449-1450, 77 Cal.Rptr.2d 463.)
Respondent Clarity Co. Consulting, LLC, and ONclick Healthcare, Inc. (ONclick), entered into a written contract whereby respondent agreed to provide services to ONclick on an hourly basis. ONclick "is a start-up health care company that was formed in 2019." Appellant Larry Gabriel, a licensed California attorney, is the General Counsel of ONclick.
ONclick did not pay for the services rendered. So respondent filed a complaint alleging an ordinary breach of contract action and related causes of action against ONclick, appellant, and other persons associated with ONclick. Acting in his individual capacity, appellant filed a special motion to strike the complaint as a strategic lawsuit against public participation (SLAPP). The other defendants did not join in the motion. The motion was denied. This appeal is from the trial court's orders denying the motion and awarding respondent its attorney fees as a sanction for making a frivolous anti-SLAPP motion. ( § 425.16, subd. (c)(1).)
Appellant contends that the trial court erroneously determined that he had failed to satisfy the first step of the anti-SLAPP statute, i.e., he had not made a prima facie showing that respondent's causes of action were based on protected activity. He also claims that the trial court abused its discretion in awarding attorney fees incurred by respondent in opposing the anti-SLAPP motion.2
We affirm. We grant respondent's motion for sanctions for taking a frivolous appeal. We order appellant and his counsel to pay sanctions of $12,798.50 to respondent and $8,500 to the clerk of this court.
The complaint alleged: Respondent claimed that it had "sustained damages in the minimum amount of $63,500.00." The prayer for relief requested both compensatory and punitive damages.
The complaint consisted of the following six causes of action, each of which was against all defendants: (1) breach of a written contract, (2) breach of an oral agreement, (3) unjust enrichment, (4) breach of a covenant of good faith and fair dealing, (5) intentional misrepresentation, and (6) concealment.
In his opening brief, appellant claims that his motion to strike was directed at only the fifth cause of action for intentional misrepresentation and the sixth cause of action for concealment. "[T]he [m]otion was not addressed to the breach of contract action." But appellant's motion to strike expressly recited that it was directed at respondent's "complaint in its entirety." Since appellant's briefs discuss only the fifth and sixth causes of action, we limit our analysis to these causes of action.
The fifth cause of action alleged that respondent had detrimentally relied on defendants’ misrepresentations concerning ONclick's financial health and "Defendants’ ability to pay for services ... provided by [respondent] pursuant to the Contracts." Defendants intentionally misrepresented that they "were not in financial jeopardy and that ONclick ... was financially sound and had secured significant investor financing to operate its business." Respondent was "deceived into believing that compliance with the terms of the Contracts would and could occur." Respondent "declined other opportunities from existing and potential clients which resulted in a loss of income ...."
The sixth cause of action alleged: "Defendants concealed from [respondent] certain information regarding the financial soundness and ability to pay for services which Defendants sought [respondent] to perform." The concealment was "a ruse designed to secure the services of [respondent] under false pretenses because Defendants could not operate without the work product created by and the services performed by [respondent]." Had respondent been aware that ONclick was in financial jeopardy, it "would not have engaged in the Contracts and/or would have taken additional safeguards to ensure payment for services contemplated and performed, such as advance payment for services."
Appellant alleged that at all times he had acted "solely in his role as the general counsel of ONclick." "[H]e was not involved in the negotiations of the [service] contract with [respondent], is not a party to [that] contract and only became involved in negotiations with [respondent] as counsel for ONclick in an attempt to work out a long-term employment relationship between ONclick and [respondent's] CEO [Jennifer McCoy] ... by and through [respondent's] attorney, Stephen Fishback." "When the negotiations broke down, and Mr. Fishback was unhappy that ONclick refused to immediately pay [respondent] on its alleged invoices, Mr. Fishback threatened to sue [appellant] personally, without any factual basis for the claim whatsoever." "Mr Fishback ... also threatened to file a complaint with the State Bar against [appellant]." 3
In a minute order the trial court ruled:
( Rusheen v. Cohen (2006) 37 Cal.4th 1048, 1055-1056, 39 Cal.Rptr.3d 516, 128 P.3d 713.)
( Wilson v. Cable News Network, Inc. (2019) 7 Cal.5th 871, 884, 249 Cal.Rptr.3d 569, 444 P.3d 706 ( Wilson ).) ( Rand Resources, LLC v. City of Carson (2019) 6 Cal.5th 610, 619-620, 243 Cal.Rptr.3d 1, 433 P.3d 899.) "At this stage, the question is only whether a defendant has made out a prima facie case...
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