Fuzu Li v. Jigang Jin
| Decision Date | 19 August 2022 |
| Docket Number | H048817 |
| Parties | FUZU LI, Cross-Complainant and Respondent, v. JIGANG JIN et al., Cross-Defendants and Appellants. |
| Court | California Court of Appeals Court of Appeals |
NOT TO BE PUBLISHED
Santa Clara County Super. Ct. No. 19CV344983
In an escalating dispute over governance of their alumni association, Jigang Jin sued Fuzu Li for defamation, based on the alleged falsity of Fuzu Li's complaints to fellow alumni about Jin's handling of the association's incorporation and filing of its Internal Revenue Service (IRS) application for tax-exempt status. Fuzu Li then cross-complained, asserting various causes of action against Jin and Yaning Li, arising from their allegedly wrongful seizure of control of the association, including Jin's filing of (1) the IRS application, (2) articles of incorporation and corporate statement of information with the California Secretary of State, and (3) a Franchise Tax Board application for state tax-exempt status. Jin and Yaning Li now appeal from the trial court's denial of their special motions to strike Fuzu Li's first amended cross-complaint under Code of Civil Procedure section 425.16.[1] The trial court found Jin and Yaning Li failed to make a prima facie showing that their alleged actions that form the basis of Fuzu Li's claims were activities protected by the anti-SLAPP statute. We conclude that Jin's submission to the IRS of an application for tax-exempt status is protected activity under section 425.16, subdivision (e)(1) and (2). Accordingly, we reverse the order and remand the matter for determination of whether Fuzu Li can demonstrate that his claims relating to the submission of the IRS application have minimal merit.
In 2018, Yaning Li was president of Xi'an Jiaotong University Alumni Association of Northern California (Association), Jigang Jin was the executive vice president and Fuzu Li served as the vice president.
In February 2018, the parties discussed the Association incorporating as a nonprofit. On March 27, 2018, Jigang Jin filed "Articles of Incorporation of a Nonprofit Public Benefit Corporation" with the California Secretary of State. He also filed a Statement of Information with the California Secretary of State on June 25, 2018. In both the Articles of Incorporation and the Statement of Information, Jigang Jin used an address in Santa Clara, CA for the Association's business address, but the address did not belong to the Association.
In the Statement of Information, Jigang Jin listed himself as Secretary and Chief Financial Officer, and Yaning Li as Chief Executive Officer. This information was hidden from Fuzu Li until March 16, 2019.
On November 17, 2018, 13 members of the Association met: the members present approved a temporary amendment to the Association's bylaws and elected a new board of directors. Fuzu Li, then the Association's vice president, was elected to be on the board of directors and take the position of secretary. But Fuzu Li did not attend the meeting and was not informed of his position on the newly constituted board.
On November 29, 2018, Jigang Jin filed with the IRS the Association's application for tax-exempt status. The application listed Fuzu Li as a director, but no notice was given to him and he did not give his consent to be included on the form. Further, the mailing address given was not a correct mailing address for Fuzu Li.
On December 20, 2018, the IRS approved tax-exemption status for the Association under Internal Revenue Code section 501(c)(3) as a public charity. Neither Jigang Jin nor Yaning Li reported the approval to the members of the Association.
On January 4, 2019, Jigang Jin filed another form-Submission Exemption Request-with the Franchise Tax Board, again without any board of directors meeting or consent.
In February and March of 2019, several meetings and conversations took place regarding another proposed bylaw. However, the new draft bylaw was never discussed at a board of directors meeting.
At a meeting on March 16, 2019, Jigang Jin proposed a vote on the new draft bylaw and a newly nominated board of directors. Neither proposal passed. Near the end of the meeting, Fuzu Li heard for the first time that he had been listed as one of three initial directors on the application to the IRS. This caused him to become upset that his personal information had been used without his consent and that he had not been told he was on the board of directors.
On March 16, 2019, Fuzu Li posted a message in the Association Wechat group telling alumni that Jigang Jin registered a nonprofit corporation using Fuzu Li's personal information without telling him and that Fuzu Li felt he had been "fooled." Fuzu Li also expressed concern based on his belief that Jigang Jin would have needed to provide Fuzu Li's social security number and driver's license number in the application.
On March 20, 2019, Jigang Jin filed a complaint against Fuzu Li, alleging causes of action for: (1) defamation - libel; (2) defamation - libel per se; and (3) false light.
Fuzu Li filed a cross-complaint on July 26, 2019, including causes of action for: (1) breach of fiduciary duty; (2) constructive fraud; (3) commercial misappropriation of likeness under Civil Code section 3344; and (4) common law misappropriation of likeness. On June 11, 2020, the trial court granted Jigang Jin and Yaning Li's motion for judgment on the pleadings as to the first and third causes of action with leave to amend and denied the motion as to the second and fourth causes of action. On June 30, 2020, Fuzu Li filed the operative first amended cross-complaint, setting forth the following causes of action: (1) breach of charitable trust; (2) constructive fraud; (3) fraud and intentional deceit; (4) civil conspiracy; (5) commercial misappropriation of likeness under Civil Code section 3344; (6) common law misappropriation of likeness; (7) negligent infliction of emotional distress.
Jigang Jin and Yaning Li each filed a special motion to strike the first amended cross-complaint pursuant to section 425.16. On December 2, 2020, the trial court denied the motions, finding that Jigang Jin and Yaning Li failed to meet their burden in the first step of the anti-SLAPP analysis. The court did not reach the second step of the analysis.
Jigang Jin and Yaning Li timely appealed.
Jigang Jin and Yaning Li have filed a joint opening brief in which they assert that the cross-claims all arise from communications made with the California Secretary of State (SOS), California Franchise Tax Board (FTB), and IRS. Under the first step of the anti-SLAPP analysis, they argue these communications are protected petitioning activity because they constitute writings made in connection with an executive or official proceeding, and in connection with an issue of public interest. Fuzu Li disputes both of these contentions.
With regard to the second step of the anti-SLAPP analysis, Jigang Jin and Yaning Li contend Jigang Jin's alleged conduct is protected by the litigation privilege of Civil Code section 47, subdivision (b). Fuzu Li argues that the litigation privilege does not apply here because there was no request that any public agency investigate or remedy any wrongdoing. On reply, Jigang Jin and Yaning Li also argue that Fuzu Li cannot prevail on the merits.
Section 425.16, "commonly known as the anti-SLAPP statute, allows defendants to request early judicial screening of legal claims targeting free speech or petitioning activities." (Wilson v. Cable News Network, Inc. (2019) 7 Cal.5th 871, 880-881.) The anti-SLAPP statute defines four categories of protected activity: "(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." (§ 425.16, subd. (e).)
The California Supreme Court has articulated a two-step procedure for litigation of an anti-SLAPP motion. (Bonni v. St. Joseph Health System (2021) 11 Cal.5th 995, 1009 (Bonni).)
"We review de novo the grant or denial of an anti-SLAPP motion." (Park v. Board of Trustees of California State University (2017) 2 Cal.5th 1057, 1067.) "We exercise independent judgment in determining whether, based on our own review of the record, the challenged claims arise from protected activity." (Ibid.) (Ibid.)
Jigang Jin and Yaning Li argue that the documents submitted to the SOS,...
To continue reading
Request your trial